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World Travel And Tourism Council

Germany travel and tourism position hindered by new passenger tax

Dec 16, 2010

As millions of people prepare to fly around the world for the holiday season, Germany’s travel and tourism industry could lose out to rival destinations, according to the organization representing the world’s leading private-sector travel and tourism businesses.

The World Travel & Tourism Council (WTTC) points to the German government’s recently enacted air passenger departure tax, which has already caused airberlin and Ryanair to cut capacity and services in the country next summer. The warning comes as emerging destinations become increasingly popular options for leisure and business travelers. Since 2007, both Turkey and Malaysia have entered the top ten of the world’s leading destinations as their international tourist arrivals increase.

WTTC has long made the case against such passenger taxes, particularly the UK’s Air Passenger Duty, believing them a barrier to the full growth potential of the industry and distorting the market by unfairly penalizing certain destinations.

“Governments continue to milk the travel and tourism ‘cash cow’ with little thought for an industry that can create jobs, generate exports, and stimulate investment to power sustainable economic growth,” said David Scowsill, President and CEO of the World Travel & Tourism Council, “The UK’s Air Passenger Duty has long set a dangerous and unhealthy precedent, and it is disappointing that the German government has also seen fit to penalize the industry and millions of travelers in this way.”

Distance-based systems unfairly penalize the economic prosperity of long-haul destinations, argues WTTC. In the case of the UK’s Air Passenger Duty for example, the Caribbean is unfairly placed in a higher-taxed band than destinations which are further away like Hawaii and America’s west coast.

“If such passenger taxes are necessary,” argued Scowsill, “a more sensible approach has been taken by the United States government. Instead of taxation that goes straight into the treasury for all kinds of uses, the US system treats passengers from all destinations equally and a proportion of the money generated is reinvested in measures to support tourism growth. It’s time the German and UK Treasury departments stopped feeding from the travel and tourism trough.”

Germany travel and tourism position hindered by new passenger tax
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