Continued from page 72
by the former chief test pilot for the Max which described the aircraſt’s anti-stall system “running rampant” on a simulator. Te pilot reported the aircraſt “trimming itself like crazy”, referred to “Jedi- mind tricking regulators” and admited: “I lied to the regulators (unkn owingly).” Te head of the FAA
rebuked Boeing for failing to reveal the messages earlier. Tere is also uncertainty
about whether other regulators will follow the FAA’s lead without concluding their own checks. A Joint Authorities Technical Review issued by representatives of nine aviation regulators this month criticised aspects of FAA guidance, and Europe’s aviation safety agency (EASA) told the FAA it was not satisfied with demonstrations of the reconfigured systems on the Max. A report by Indonesian
investigators into the first of the crashes, by a Lion Air 737 Max, published last week, concluded a series of failures by Boeing, Lion Air and the pilots led to the disaster and suggested the aircraſt should not have been flying. When the Max does return,
airlines will face a batle to convince passengers to board. United Airlines has already said it will give passengers the option of not flying on the Max. Two US consumer surveys
in June suggested 70% of passengers would hesitate to book a Max flight and only 14% would fly the aircraſt within six months of its return. A poll of corporate travel managers suggested two in three corporate travellers would change their plans to avoid flying the Max. Boeing also faces lawsuits from crash victims’ families.
COMMENT: Address the invisible burden of tourism and embrace taxes to ‘Tourism comes at a co
already introduced or are considering a tourism tax – a levy paid on entry or departure or, more commonly, added to accommodation costs. Japan and New Zealand have
Can you name an industry other than tourism where the main ‘product’ comes free? Tourism businesses provide
services such as travel, accommodation, tours and atractions, yet the main product or experience isn’t provided by them but by the city, the beach, the natural world, the people, their culture and history. Te destination itself comes without a price tag. Tat does not mean it’s cost-free.
In March, we published a report ‘Destinations at Risk: Te Invisible Burden of Tourism’ with Cornell University’s Centre for Sustainable Global Enterprise and EplerWood International. A central theme of the report
is that while every tourist brings economic benefits that are well understood, they also bring a range of costs – an ‘invisible burden’ that is not currently accounted for. Tese costs are mostly related
to use of municipal services, public assets and the natural environment – such as costs to maintain public spaces or national parks, or to upgrade infrastructure to meet increased visitor demand – and are not factored into the tourism product. Tey are either picked up by residents or, if maintenance or infrastructure is overlooked, result in degraded public assets and environmental damage. So how should destinations
respond to ensure they cover the invisible burden of tourism? One option is to introduce a
charge to cover the costs of managing tourism. Some destinations have
70 31 OCTOBER 2019
introduced such taxes this year, and many cities are considering the option. Venice now charges an entry fee for day-trippers and Edinburgh is on the way to introducing a tax once the necessary legislation is in place. Oſten there is a twofold
motivation behind introducing a tax – to close funding gaps at the municipal level and to address concerns from residents about the impacts of tourism – oſten linked to ‘overtourism’.
Understand tourism’s costs
Tourism taxes could provide much- needed additional resources to cover the invisible burden of tourism, but this will only happen if destinations understand and account for the full range of costs and how these change as visitor numbers grow. Only then can tax revenue be allocated in a way that addresses the invisible burden. At the Travel Foundation, we don’t
know of any destination doing this. It is the allocation of tax rather
than how it’s raised that stands at the heart of this issue. Even without a tourism tax, there
are other taxes that contribute to the public purse – such as VAT on accommodation and other sales, corporation tax on profits, business rates and property taxes, and income tax paid by tourism employees. Te Travel Foundation research
in Cyprus, carried out with Tui and business consultancy PwC, estimated the total annual tax contribution from tourism operations relating to 60,000 Tui customers at €13.7 million – equal to €25 per customer per night. Te
Venice, and inset, Jeremy Sampson, the Travel Foundation
‘tourism tax’ element of this – an airport departure tax – accounted for only €1.4 million. Tere is a strong argument for
local administrations to see more of the revenue that already comes from the tourist sector. Yet tourism taxes are oſten in place in countries that offer the tourism industry tax cuts and tax breaks. For example, the EU applies
a minimum standard VAT rate of 15%, but member states can apply a reduced rate on hotel accommodation. Twenty-five of the EU’s 28 members, including the UK, do this. Te VAT rate on hotels in Spain, Italy and France is 10%, in Germany
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