30th January 2008

Cheap flights “Squeezing the life out of British tourism”

One of the UK’s major hotel companies has told MPs that short haul airlines are “the single biggest cause of decline in traditional tourism resorts” and has urged the Government to end the tax breaks which provide budget airlines with an “unfair grip on holidaymakers that is squeezing the life out of British tourism.”

Giving evidence to a House of Commons Culture Media and Sport Select Committee Inquiry yesterday (29 January) Travelodge told MPs that unfair tax breaks to short haul airlines “are slowly bringing the curtain down on regional tourism.”

Travelodge submitted research evidence to the Inquiry showing that inward tourism spend was declining whilst outward spend was rapidly increasing, creating a balance of trade deficit of £18bn.

Calling for a level playing field and for VAT to be applied to air travel, Travelodge Director of Communications Greg Dawson stated that “VAT exemption on flights immediately puts domestic tourism on the back foot. It is an inbuilt cost incentive to holiday abroad rather than stay at British resorts and attractions.” He claimed that a 10 percent reduction in overseas flights by British tourists would create 31,250 jobs.

The evidence put forward by Travelodge provides strong endorsement of the economic analysis which Stop Stansted Expansion (SSE) has carried out since 2003 showing a direct link between the growth in cheap air travel and the deterioration in the UK trade deficit on travel and tourism. However, it is the first time that a major UK hotel company has pointed out that cheap flights are having a direct impact on the UK tourism industry, costing thousands of jobs.

Last summer, SSE submitted extensive evidence to the Stansted Public Inquiry on the adverse UK consequences for the UK economy if BAA’s request for unlimited passenger throughput on the existing runway were to be approved. This showed that the new jobs that would be created at the airport would be greatly outweighed by job losses in the UK tourism industry. Outbound tourism from the East of England region outweighs the number of incoming foreign visitors by a factor of almost 5 to 1 and results in a £2bn spending deficit for the region.

Welcoming the new evidence from Travelodge, SSE Economics Adviser, Brian Ross, commented: “Hopefully this will help people understand what we mean by our current poster campaign: “Support the British Economy – Stop Stansted Expansion”.

Campaigning against proposals to expand Stansted Airport