Arguing that it would dampen travel demand and harm travel agencies, ASTA joined the World Travel & Tourism Council (WTTC) in opposition to a proposed increase in the UK Air Passenger Duty. The tax, ASTA said, while expected to add £2.8 billion ($4.4 billion) in additional taxes to UK government coffers, is also forecast to dampen the demand for travel.
Ultimately it would harm not only the UK economy but also those countries to which the British travel most frequently, including the United States and Caribbean nations, ASTA said. Once the new tax is in effect, a family of four would pay an additional £260 ($408) to fly from the UK to Florida.
Research recently completed by Oxford Economics and sponsored by WTTC illustrates the unintended consequences countries face when overburdening the aviation industry with high taxes, ASTA said.
The research examines how sensitive passengers are to ticket taxes that increase the cost of travel. The planned Air Passenger Duty (tax) increase, scheduled to begin in April 2012, would not only impact tourism exports of British citizens traveling outside the UK, but would also have a profound impact on inbound tourism and the British economy. The data shows that removing the tax would result in an additional 91,000 British jobs and add an additional £4.2 billion ($6.6 billion) to the economy in 12 months.
“Placing additional taxes on airline travel might assist countries with closing budget gaps in the short run, but such actions have long-term implications,” said Tony Gonchar, ASTA CEO. “WTTC’s research is a wake-up call for all countries looking to unfairly burden the tourism industry with excessive tax burdens. It’s not just the airlines that feel the resulting pain, but travel agencies who sell air, hotels and resorts, cruise lines and car rental companies to name a few.”