Two new reports tell us that the UK tour and travel industry is returning to levels of business not seen since the prior to the trough period of the 2008-09 economic recession:
First, the elimination of the Air Passenger Duty (APD) has led to a double digit increase over two years in departures to Florida, according to ABTA.
Second, the number of tour operators, travel agencies, travel agents and travel business volume has grown dramatically—almost reaching pre-2008 levels. More detail follows:
1. Elimination of the APD: Beginning May 1, 2015, the British government eliminated the APR for children under 12 years of age ABTA said figures from GfK‘s Leisure Travel Monitor show sales for the Caribbean are up 29 percent for this summer and bookings for Florida are up 13 percent over two years. Both destinations, especially Florida, are sold as family destinations in the UK.
ABA said the increase was “perhaps partly boosted” by the abolition of APD for children. Now, beginning this week (March 1st), families with teenage children will fly for less with the removal of APD on economy flights for children under 16. The effective result of this is to lower the cost to a long-haul destination such as Florida by some $400 in airfare.
Originally, when it was first implemented in 1994, the APD was a flat £5 charge on flights within the UK or elsewhere in the EU, and a £10 charge on all other flights. It was aimed at raising revenue to fund environmental programs, but soon grew to cover more individuals and increased in size as it was found to provide substantial revenue for the government’s general fund. In recent years, the travel and tourism industry had been waging a vigorous campaign to have it eliminated or reduced. The exemption of children under 12 (and later 16) was first announced in the fall of 2014.
2. Business and Businesses are Back for UK Trade: It was revealed last week that combined travel agency and tour operator turnover in the UK increased for a sixth successive year in 2015 to almost £32 billion ($44.4 billion). The 12 percent year-on-year rise, said an analysis of the UK’s Office for National Statistics (ONS) data by the UK’sTravel Weekly’s sister publication, Travolution, was the second-highest annual increase since 2008.
ONS data also showed the number of agencies surpassed 4,000 in 2015 and the number of travel agents in the UK will recover to near pre-recession levels next year. The data analysis for the 2016 Travolution Innovation Report shows there were 66,224 agents in the UK last year. This figure is forecast to increase to 68,514 in 2016, close to the 69,471 recorded in 2008 at the start of the downturn, and sizable increase over the nine-year low in 2013 of 59,289.
The data show tour operator numbers and employment fared even better than agents during the recession, weathering the downturn better and recovering earlier.
—In 2008 there were 1,590 tour operators with 18,757 staff.
—By 2011, after two successive years of decreases, there were 1,615, with 19,090 employees.
—In 2015, there were 1,920 tour operators and 22,215 employees.
—in 2016 the figure is forecast to top the 2,000 mark, with employees rising to 23,364.