TRAVEL WEEKLY BUSINESS
nference looked at the challenges and opportunities for travel businesses. LEE HAYHURST reports ECONOMIC UPDATE: OUTLOOK POSITIVE DESPITE HOUSEHOLD DEBT
The economic outlook is as good as it has been for more than five years, but high levels of household debt remain a concern, according to Deloitte’s Graham Pickett.
He told delegates that his economic
update was the most positive he had ever delivered at a Travel Matters event, with most key indicators looking up. But Pickett said benign inflation and a rise
in real wages were allowing the UK to cope with household debt amounting to £53,000 per person.
He said on current trends, the level of UK household debt would rise from £1.34 trillion to £2.5 trillion by 2020. Pickett said 26% of people were worried about interest rates rising. “We are definitely starting to see
sustainable recovery in the UK for outbound holidays. In international air traffic, there was a blip in March, but it is still positive. “We see inflation trending up a bit, but
there are no alarm bells there. “There has been a fairly rapid rise in consumer spending power. A real feelgood factor is beginning to appear. “We are anticipating more investment in the UK economy and hopefully productivity and the general trend of wage growth will come as a result.” Pickett said chief financial officers had
expressed uncertainty in Deloitte’s regular survey before the general election, but he expected that to have improved. “Generally, most of us would agree
ATOL PROTECTION: SURPLUS MAY LEAD TO REVIEW OF LEVY
The £2.50 per person Atol Protection Contribution levied on package holidays could be reviewed now that the fund that backs Atol is well into the black. The Air Travel Trust last week revealed the
fund was a record £93.7 million in surplus on March 31, and that that figure had since topped £100 million.
The Association of Independent Tour Operators believes the fund is now at such a
“We are definitely starting to see sustainable recovery in the UK for outbound holidays”
that the election result will be positive for business,” he added. Abta chief executive Mark Tanzer also sounded a positive note: “I do feel optimistic that if we make the right decisions [as a country], there is growth out there.”
level that a review of the charge is due. Atol is also backed by a £350 million
insurance policy. MP Robert Goodwill, parliamentary under-secretary of state for transport, said it did not seem right that people flying to Benidorm and Barbados were charged the same amount. “We need to look at whether banding is appropriate,” he said. “We have had a good year and have not had failures, so the fund is getting topped up. “We also need to decide what happens
‘AIR DELAYS THREATEN
A PPI-STYLE SCANDAL‘ Travel risks having its own payment protection insurance-style scandal if it does not properly address flight-delay compensation claims, Pickett warned. He cited European regulation (EC) 261/2004, under which consumers have won compensation. “This is going to bite us if we do not address it,”
said Pickett. “It is no good the industry putting its head in the sand. It could upset a successful year.”
if the fund reaches a level at which we are comfortable. Should we reduce those fees? That’s something we need to talk about and we are open to suggestions.”
Goodwill said the
government had made progress addressing concerns about Air Passenger Duty by removing the higher bands and taking children out of the tax. He reminded delegates VAT is
not charged on flights but said the
devolution agenda would open up debate on APD.
2 July 2015 —
travelweekly.co.uk • 79
“We have had a good year and
no failures, so the fund is getting topped up”
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