Budget 2018: A small victory for Travel and Tourism
Has the Budget done enough to reassure a nervous travel sector?
The Chancellor didn’t grant the travel industry its number-one wish; there was no reduction in Air Passenger Duty (APD) despite the continuing calls from the industry. This wasn’t really a surprise given APD generates approximately £3 billion for the UK treasury and any reduction would impact other politically sensitive areas such as health, education and social services. That said Philip Hammond has done some things that may boost the spirits of the industry.
Personal allowances have gone up which will increase the pounds in the pocket of customers - the absence of an attack on higher rate tax relief on pensions will also help a consumer segment which traditionally spends on holidays. Hopefully this will improve confidence in what is now an increasingly nervous marketplace.
The change to lettings relief may limit further growth of Airbnb and reduce the impact of existing Airbnb businesses. This may represent a small respite for the more traditional hotels and B&Bs they compete with.
The decision to open e-Passport gates at airports to non-EU visitors may increase inbound tourism from the US, Canada, Australia, New Zealand and Japan. For firms with agencies on the high street a cut in business rates is also very welcome.
Brexit worries combined with concerns that the forecast growth for this year is only 1.3% and 1.5% going forward may impact consumer appetite for future commitments such as large holidays. The sector will be hoping that a Brexit deal is done which, combined with the British love of travel, will lead to a late surge in bookings next year.
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This Insight is part of exclusive content being provided by our experts on the Autumn Budget. View our special Autumn Budget 2018 coverage to read more commentary and analysis to help your business. Alternatively, send us an online enquiry to contact one of our business experts or speak to our Head of Travel & Tourism, Rajeev Shaunak.