Advising Government and industry on policy

The 2011 Government Tourism Policy set out our role as the UK’s national tourism agency. In line with other arm’s length bodies, we cut back on policy and advocacy. The Tourism Policy does however require us to maintain ‘a streamlined advisory function’, to advise Government on issues which affect the UK’s international competitiveness. 

We host two stakeholder groups, the British Tourism Industry Group (BTIG) and the Welcome to Britain stakeholder group which provide government and industry with a forum to engage on policy.

Beyond these channels, we work with Government and industry across the UK, focusing on issues at the heart of Britain’s competitiveness as a global tourism destination.  These include:

Air Passenger Duty

The cost of travelling to the UK is a major factor affecting Britain’s competitiveness as a destination for international tourism.

We have identified Air Passenger Duty (APD) avoidance in the behaviour of visitors from long haul markets, with some Australian travel agents encouraging families to spend one of two days in Europe before flying home, in order to avoid paying APD on their return flight.

Recent years have seen considerable reforms to APD announced by the Chancellor of the Exchequer, however, Bands C and D of APD for long and medium haul destinations have been abolished. This means that the cost for Chinese visitors to return to Beijing, for example, from Britain has reduced from £85 to £71.

In addition, children under the age of 14 were excluded from APD from 1 May 2015, and children under the age of 16 from 1 March 2016.

Despite these reforms, competitors’ aviation taxes are levied at a substantially lower level than APD. Tax is a matter for HM Treasury, and we will continue to follow developments closely.

Transport infrastructure

Aviation

Aviation is an essential enabler for inbound tourism. 72% of inbound visitors to Britain arrive by air and for many the choice is between flying to Britain or flying elsewhere.

More flights and greater ground capacity are necessary for Britain to achieve its full tourism growth potential. By 2030 the UK could earn £78 billion a year in spending from inbound visitors, provided sufficient aviation connectivity to meet demand from international visitors is available. Failure to provide sufficient connectivity means part of this economic benefit will be lost. The UK economy needs to compete in both established and emerging markets.

We agree that Britain enjoys good connectivity to established markets but connectivity to emerging markets is comparatively weak. Connectivity to emerging markets and cities is critical, if we are to secure tourism growth in the medium-long term.

Our analysis demonstrates a clear need for a future aviation policy to promote new airport capacity and to retain a UK hub airport. Such a policy is achievable within current environmental targets. The Committee on Climate Change found that demand for flying can continue to increase while still meeting climate objectives, stating that increases in passenger demand of around 60% on 2005 levels is compatible with UK climate change targets.

Based on this, we have identified four future policy needs for aviation. Namely, a policy that:

  • Supports the delivery of new capacity
  • Supports regional airports and the South East
  • Maintains a UK hub airport
  • Ensures that growth is environmentally sustainable

An independent Airports Commission was established by the UK Government to examine the need for any new airport capacity to accommodate tourism growth and ensure that Britain remains a competitive destination for airlines and their passengers in the long term. The Airports Commission final report was published in July 2015.

Rail

Rail transport is the preferred means of transport for international visitors when going between London and other destinations in Britain. In 2013, almost three-in-ten of the 32.8 million international visitors to Britain travelled outside of towns or cities on a train. Consequently, rail can play a key role in ensuring that all parts of Britain see the benefits of tourism. Over the past decade there has been a 30% increase in the number of international visitors taking train journeys.

We have found that a number of existing factors do not address the specific needs of international visitors. These include: a lack of foreign language provision; a confusing and fragmented rail network; and a system where international visitors cannot print train tickets before visiting Britain.

A strong domestic transport network, which is easily navigable by international visitors and includes high speed rail, will encourage visitors to travel across Britain, spreading the benefits of tourism throughout the countryside. We will support VisitScotland, Visit Wales and the Northern Ireland Tourist Board’s work on this area.

VAT

EU legislation allows member states to set a separate VAT level for hotels, restaurants and amusement parks. Many EU member states have a reduced rate of VAT for these services. Only Denmark, Slovakia and the UK do not. At 20% the UK has one of the highest European VAT rates for the hospitality sector.

Cut Tourism VAT is campaigning for the rate of Tourism VAT to be brought into line with competitor destinations within the European Union.The Campaign is led by Bourne Leisure Group, Merlin Entertainments Group, the British Hospitality Association and the British Association of Leisure Parks, Piers and Attractions.

A report commissioned from Deloitte by Bourne Leisure and Merlin Entertainments Group found that although there would be an initial loss of VAT revenue in the first few years, over ten years HM Treasury would achieve a financial gain of £2.6 billion (net present value), and generate 78,000 jobs.

Tax is a matter for HM Treasury, and we will continue to follow the argument and evidence closely. In the short term, there is clear scope to do more to highlight the VAT refund process for international visitors.

Visas

The majority of foreign visitors to the UK do not need a visa but, with around 1.9 million visit visas issued each year (and increasing), it is important to have a good quality visa service enabling legitimate travellers to come to the UK.
The UK visa service compares well with that of competitors, like countries in the Schengen Area and the USA. Nonetheless, issues remain. There are basic misconceptions to be tackled (for example, relating to documentary requirements) and more can be done to demystify the service (for example, by simplifying the way we describe our service standards).

We work very closely with the Home Office, on an ongoing basis, to find new ways to improve the visa service to maintain our international competitiveness. There have been substantial reforms in recent years. For example, China has seen trials of accepting the Schengen visa form for UK visa applications as well as a new 24-hour ‘super priority’ visa service; while visitors from Oman, Qatar and the UAE can now travel to Britain free of charge on an Electronic Visa Waiver.

Working with the Home Office, we will continue to respond to customer feedback and learn from competitors - like Australia, those in the Schengen Area and the USA - who have implemented packages of reform to their visa processes in recent years.