G20 Leaders Flag International Tourism As a Driver of Jobs & Growth

Los Cabos - G20 Try to Chart a Way Past Economic Rocks

The G20 summit leaders have for the first time flagged up tourism as a positive force for economic growth and job creation

The Leaders’ Declaration from the annual meeting, this year held in Mexico at Los Cabos, stated: “We recognise the role of travel and tourism as a vehicle for job creation, economic growth and development, and, while recognising the sovereign right of States to control the entry of foreign nationals, we will work towards developing travel facilitation initiatives in support of job creation, quality work, poverty reduction and global growth.” 
Whilst the global tourism and travel industries have known about the positive aspects about tourism mentioned in the statement, very often national governments have only seen it as a useful revenue raising asset rather than an industry to be encouraged.  The WTTC (World Travel & Tourism Council) says the industry will directly contribute $2 trillion in GDP and 100 million jobs to the global economy in 2012. When the wider economic impacts of the industry are taken into account, tourism is forecast to contribute some $6.5 trillion to the global economy and generate 260 million jobs - or one in 12 of all jobs on the planet.

I hope George Osborne was a party to the G20 statement! The UK's Air Passenger Duty is not only a barrier to tourism and business but is also a regressive tax that hurts the people most of all that can ill-afford it .  It also hurts developing countries by reducing the number of Brit tourists visiting their countries.  Today the Caribbean Tourist body again renewed its calls to the Chancellor to cut the tax.  A delegation came last year to London to plead that the 4000 - 6000 mile Band which the region is in (Barbados by only 250 miles) is grossly unfair when flying to Hawaii is in the 2000-4000 band even though it on the other side of the world....

Another UK tax which must hurt inbound tourism is VAT at 20% on hotel accommodation.  The French recognise that Hotels are a vital element in tourism - they charge VAT at 5.5% and allow their cities to charge a local tax on a per person per night basis which is usually a modest  Euros 0.5 to 1.5.  Despite the UK Hospitality industry calling for a reduction in Hotel VAT, no UK Chancellor has yet to act.  Plenty of noise about promoting the UK but nothing to make visiting and staying here cheaper, which is what every tourist looks for. 

Some MPs in Westminster obviously do recognise that the effect of APD on the UK economy should be properly investigated as 25 all-party MPs have just called for an independent study to assess the actual effect of APD to be presented before the 2013 Budget.    It's an idea which has been proposed by the industry before (by IAG's Willie Walsh when he was head of BA I think I recall).    Of course anything quite so radical and also something that might just prove the damage APD is doing overall to the UK was ignored in case it might do so.   One might hope that the oft quoted fact that the Dutch dropped their version of APD after a year might serve as a warning to the Treasury here.  However the siren call of the estimated £2.2 billion or more that APD is bringing into the treasury coffers has deafened the Government to that fact and the widespread public and industry antipathy to APD. The Dutch tax raised a fraction of what the tax actually cost the country overall as a direct result of bringing it in.  I guess as a Chancellor you can actually count the revenue coming in but only estimate what might have been gained for the economy as a whole without APD.  Lets hope the 25 Westminster MP's get their way and that the debate about APD finally gets an independent study to throw an unbiased light on it.