Travel’s recovery at risk from economic woes

The present ‘turbulence’ in the financial markets is a real cause of concern for ABTA members, the association’s Chief Executive Mark Tanzer told delegates in Morocco. He said higher interest rates on top of rising energy bills are putting a double squeeze on businesses, increasing costs at a time when clients are tightening their belts. “Many travel businesses have come out of the pandemic with less financial headroom than they went into it, so increased borrowing at higher costs is not an option,” said Tanzer. The (travel) industry has the potential to grow by 15% over the next five years, given the right regulatory and fiscal environment, he added. New ABTA research commissioned from York Aviation shows the outbound travel industry accounted for £49 billion of Gross Value Added pre-pandemic. Tanzer said Covid has “shone a harsh light” on the system of money flowing through the travel industry, customer protection and “who ultimately is sitting on the risk when things go wrong”. He added: “It’s right that we should look at the system of financial protection to remove inefficiencies and duplication but we should proceed with caution before radically changing a protection system which has served the industry – and its customers – very well through times of crises.” Tanzer called for a freeze on the level of Air Passenger Duty “to get international travel going”. “Over recent years, APD has increased with inflation and given the current economic backdrop, a similar rise would add significantly to the costs for customers who are already feeling squeezed,” he said.