world travel and tourism council makes case to eu finance ministers
WTTC urges avoidance of knee-jerk tourism tax hikes
The World Travel & Tourism Council (WTTC) has written to all 27 Finance Ministers in the European Union urging them to recognize 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 and CEO, WTTC, reminds Finance Ministers that travel and 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).
The letter said: “Given the labor intensity of travel and tourism, and as the above data shows, travel and tourism is one of the few economic sectors which can generate economic growth with jobs.
“Travel and 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 €300 million earned in tax revenues was negated by the cost of €1.2 billion to the economy as passengers used alternative airports in neighboring countries.
“The Irish Air travel tax of €10 per person was reduced to €3 per person following a 2 million decrease in travelers to Ireland over 3 years. In Germany, the reduction of VAT from 19 percent to 7 percent 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 percent, and the number of unemployed persons has dropped significantly more than in other sectors.
“Simple measures can be taken to stimulate travel and tourism, increase visitor revenue, and, therefore, jobs. For example, a recent study by WTTC and the World Tourism Organization showed how improvements in visa policies in G20 countries could increase travel and tourism employment by an additional 5 million jobs over 3 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.”