Govt must keep a close eye on the overall cost of travel: ABTA

Mark Tanzer, Chief Executive of ABTA – The Travel Association said: “ABTA research shows that the travel industry is well positioned to boost economic growth over the coming years – but to do that, we need the government to put in place tax, policy and incentive regimes that support businesses in the sector and their customers.

“Unfortunately, at least in the short-term, today’s announcements will make life more difficult for travel businesses. Notably, whilst it is welcome that rates relief is extended for a further year, the reality is the 40% rate will represent a significant hike in bills for many high-street agents. Additionally, the cost of employing staff that the industry needs to thrive will increase for many travel firms.

“Meanwhile, for our customers, further increases in APD will be disappointing. While a £2 increase might not sound much, it brings UK air tax on economy flights to £15 per person, per flight. UK travellers already pay more on air tax than most other countries, and it is one of a multitude of taxes and charges people often have to pay on their holidays.

“The UK already charges the highest rate of APD in Europe. The Office for Budgetary Responsibility notes that APD is amongst the fastest growing of all taxes in the UK. The government must keep a close eye on the overall cost of travel to ensure that hard-earned holidays remain within reach.

“However, there are some bright spots in today’s Budget for the long-term outlook of our sector. We welcome recognition from the Chancellor that high street businesses are vital to the health of places across the country, with the announcement of a permanently lower rate of business rates from April 2026, and also investment in the decarbonisation of aviation.

“ABTA members are responsible for the happiest weeks of people’s year – their holidays, which offer the opportunity to relax, spend time with family and are valuable for mental health and wellbeing. The travel industry has made a remarkable recovery after the COVID-19 pandemic, and has bucked the wider consumer confidence trend in recent months with people continuing to spend and commit to their holidays. We hope the additional pressures this Budget puts on businesses doesn’t serve to slow down that trajectory and dampen the sector’s growth opportunities.”