Taxation is global tourism’s biggest threat - WTM report

Friday, 9 November 2012 02:19 - - {{hitsCtrl.values.hits}}

Increased taxation by governments desperate to pay down their deficits could throttle the life out of the global tourist trade, the World Travel Market Industry Report 2012 released early this week has found.

A total of 60% of the 1,310 respondents to the survey say taxes levied around the world, from additional airport charges and flight taxes to new city taxes and bed charges, have the biggest negative impact on the tourism industry.

This is nearly twice the 34% who claim the cost and hassle of obtaining a visa has the worst impact and dwarves the 7% who claim other factors, including economic uncertainty, exchange rates and political instability, is the biggest problem.

Not only are such taxes already causing concern but they are predicted to have a strong impact on the future, with 17% claiming they are the main concern and a further 67% adding they are of significant concern. As few as 13% of travel industry workers saying they were only a slight concern while just 3% say they were of no concern at all.

Nor is there any real belief in the industry that the taxation is being undertaken in order to improve the tourism product; only 30% of respondents think all or most of the revenues raised will be reinvested in tourism. A total of 39% think less than half of the revenue raised will be reinvested while 17% claim none of the revenue will be used to the benefit of the industry.

Nor is this a problem the travel trade thinks will go away soon. With three quarters (75%) believing their governments view tourism as an easy target to raise revenue, 76% of respondents said they expect more national tourism taxes to be introduced globally in the next year with 67% adding further local taxes are to be expected.

Reed Travel Exhibitions Chairman World Travel Market Fiona Jeffery said: “Taxation is clearly the main concern of the travel industry. Over the past year we have seen a number of taxes increased – including Air Passenger Duty in the UK- and other taxes introduced on the tourism industry, including in-resort taxes.

“The fear is that taxation will continue to increase as the industry is seen as a soft touch for national governments to pay off their deficits. Tourism is a great way of spreading wealth on a global level, a strong employer and a way of providing people with general wellbeing and memories they will keep for the rest of their lives but this can all be deeply damaged by over-zealous taxation.”

The industry is also right to be concerned over the impact of additional taxation as a total of 44% of the 1,001 members of the public surveyed by WTM say such general taxation will mean they are either significantly or slightly less likely to holiday overseas as a result. More specifically 47% said they would think twice about visiting any country that introduces a tax on tourists to help tackle its financial deficit.

These statistics are unsurprising when it is taken into account that 70% of consumers believe it is wrong for governments to target tourists as a way to balance their books.

“Holidaymakers can very quickly see through any government which targets tourists to raise revenues,” Jeffery added.