The
World Travel & Tourism Council (WTTC) has written to all 27
Finance Ministers in the European Union urging them to recognise the
important role of the industry in stimulating economic growth and
jobs, while avoiding unproductive knee-jerk tax hikes at a time of
austerity.
The
letter, written by Dr Michael Frenzel, Chairman of the Executive
Board, TUI AG and Chairman, WTTC and David Scowsill, President &
CEO, WTTC, reminds Finance Ministers that Travel & Tourism is a
key generator of employment across the European Union directly
generating 10 million jobs across Europe, substantially more than the
automotive manufacturing (3.2 million), mining (3.6 million) and
financial services sectors (8.5 million).
‘Given
the labour intensity of Travel & Tourism, and as the above data
shows, Travel & Tourism is one of the few economic sectors which
can generate economic growth with jobs,’ the letter says.
“Travel
& Tourism is seen as a ‘cash cow’, an ‘easy source’ for
generating quick money through new or expanded taxation. However, the
evidence suggests that taxing tourism does not reap benefits:
Recent
research by WTTC shows that the UK’s Air Passenger Duty costs the
UK economy £4.2 billion in GDP and 91,000 jobs through lost business
The
Netherlands abolished its air departure tax after one year following
significant decreases in passenger volume. The Euro300m earned in tax
revenues was negated by the cost of Euro1.2 billion to the economy as
passengers used alternative airports in neighbouring countries
The
Irish Air travel tax of €10 per person was reduced to €3 per
person following a 2 million decrease in travellers to Ireland over 3
years
In
Germany the reduction of VAT from 19% to 7% for accommodation
services at the beginning of the 2010 – in the midst of the
financial and economic crisis – has paid off economically. The
number of available jobs in the hotel industry has since then
increased on average by 20%, and the number of unemployed persons has
dropped significantly more than in other sectors
Simple
measures can be taken to stimulate Travel & Tourism, increase
visitor revenue and therefore jobs. For example, a recent study by
WTTC and the World Tourism Organisation showed how improvements in
visa policies in G20 countries could increase Travel & Tourism
employment by an additional 5 million jobs over three years and
generate an additional US$206 billion in tourism exports. This
research was presented to the G20 world leaders by President Calderón
at the G20 meeting at Los Cabos in June.