Tourism deficit "wiped out" by pre-holiday spending?
 

As this concerns aviation policy, I hope it is best here rather than JB:

I'm sure we're all familiar with the arguments about the tourism deficit caused by Brits spending more abroad each year than Johnny Foreigner spends on visits to the UK.

I have always countered this argument by saying that such a deficit is natural, given that the climate elsewhere is nearly always more favourable than it is here, so an imbalance is inevitable, just as it is in Germany and the Nordic countries. If we didn't have aircraft, ferries would do the same job.

The other counter argument is that even if the imbalance is true, any attempt to correct it through higher APD will backfire, as this will put far more foreign tourists off from visiting the UK, as they will be comparing ever increasing fares on flights to Blighty against much cheaper European counterparts.

According to the just-release DfT consultation, there is another reason why the deficit is not as great as claimed - people spend almost as much on the high street before departure as they do on the trip itself. That doesn't add up to me - surely people would stock up on 100ml essentials before travelling, and they'd buy more expensive items like clothes when they got there.


Any comments?

Buying clothes that you like often takes time - unless you're male and just want to buy a pair of jeans from Gap. Furthermore, by buying clothes a few weeks before your holiday, you can take them home, try them on again, and if you don't like them, then take the clothes back to the shop and change them for something else. The time pressure of "I need something to wear NOW" doesn't exist - bit like doing Xmas shopping before it gets to 24 December

The time on holiday is short and precious. A trip to the High St has rather less value so makes more sense to buy stuff while in your home town, and then spend as much time as you can while on holiday enjoying yourself instead of trawling the clothes racks in a department store abroad. While retailers are slowly becoming more pan European, people generally are keen on brands they know.

Everyone needs to buy food to eat - meaning they have to visit the High St. Retailers in the UK know full well that people are going on holiday and will try every trick in the book to get people to buy clothes. Clothes shops in Spanish beach towns can only compete *once* you get to Spain - by which time people generally have minimal need for extra clothes.

OK, fair points - I was thinking more of people heading for Milan and Florida.

My favourite SLF remark checking in at MIA "But you let us check these suitcases at Heathrow, why not here?"

I don't like bumping my own threads, but this issue is fundamental to whether or not the airline industry is going to get its way in Westminster. The anti-aviation lobby is well tooled up with its rhetoric about pollution, but they also frequently trot out the line about aviation being "subsidised" to the tune of £10 bn per year. Part of this claim comes from this tourism deficit.

As long as politicians can see the airline industry as a net drain on resources, then they will continue to eek up Air Passenger Duty and resist demands for airport capacity increases. Either we let them do this or we provide evidence to the contrary.

Which is it going to be?

Whether you spend all year in the UK, or have a holiday every month, you still need clothes to wear, and are still going to buy them in your hometown. Claiming that air travel benefits the UK economy by encouraging people to buy T-shirts and shorts that were made in Asia is flimsy at best

Many UK residents will book and pay for holiday accommodation while they are still in the UK, either online through a hotel booking website, or via a travel agent that may be a website or online. Yes, some of the money may stay with the travel agent, but the bulk is paid to the hotel based outside the UK.

The only other big spend before leaving the UK is flights, but difficult to justify paying money to Ryanair for a flight to a Spanish beach as significantly benefitting the UK economy.

While ferries did the same job as aircraft in terms of exporting UK tourists to western Europe, they were much less effective at doing so. To go from major UK population centres to anywhere beyond Calais took a lot of time - and the area around Calais has only limited visitor appeal (unless you want to buy booze + fags and pay less tax to the UK Govt). The number of destinations by LCC from main UK airports for a weekend break is enormous - that weekend trip from Manchester to Barcelona is very easy to do. As a country which is a net exporter of tourists, aviation makes it much easier for people to spend their money abroad. Consumer spend on jet fuel has very limited benefit to the UK economy.

Having a holiday each year is good for worker morale and productivity.
Brits spending a week in a cottage in Devon is good for the UK economy. Those flights from Luton to southern Europe are only a bad thing for the UK economy.

If the issue is the APD then an other issue is that such a small percentage of Brits travel by air - that in general we do not care how much it costs ! Those on business do not notice it and those that may travel 2-3 times a year just put up with it.

In the same way we put up with the 'fuel' costs ( prices on the way up ). I believe more people care about immigration, fuel costs and the state of our roads.

We are fed so many conflicting statements about what tourists earn us or cost us - if it is government based 'facts' then it is worth nothing.

The annual trip abroad is a net import because most of the money is spent abroad, it is taxed accordingly.

A lot of the pleasure of travel is the anticipation, hence the retail therapy in the weeks leading up to the trip.

A win win situation for the taxman.