UK travel industry faces tough times with proposed changes to Budget 2024

“ABTA’s research shows that the travel industry is well placed to drive economic growth in the years to come – but to do this we need the government to put in place tax, policy and incentive regimes that support companies in the sector and their customers.

“Unfortunately, at least in the short term, today's announcements will make life more difficult for travel agencies. In particular, while it is welcome that rates relief is being extended for another year, the reality is that the 40% rate will represent a significant increase in bills for many high street officers. Additionally, the cost of employing the staff the industry needs to thrive will increase for many travel companies.

“In the meantime, for our clients, further increases in ODA will be disappointing. Although a £2 increase doesn't sound like much, it brings the UK air tax on economy flights to £15 per person per flight. British travelers already pay more in air taxes than most other countries, and it's one of many taxes and fees people often have to pay while on vacation.

“The UK already has the highest ODA rate in Europe. The Office for Budgetary Responsibility notes that ODA is one of the fastest growing taxes in the UK. The government must closely monitor the overall cost of travel to ensure that hard-earned vacations remain within reach.

“However, today's budget contains some positive points for the long-term outlook for our sector. We welcome the Chancellor's recognition that high street businesses are vital to the health of localities across the country, with the announcement of a permanent cut in business tax rates from April 2026 , as well as investments in the decarbonization of aviation.

“ABTA members are responsible for the happiest weeks of the year: their holidays, which provide the opportunity to relax, spend time with family and are valuable for mental health and wellbeing. The travel industry has seen a remarkable recovery from the COVID-19 pandemic and has bucked the overall trend in consumer confidence in recent months as people continue to spend and commit to their vacations. We hope that the additional pressures this budget places on businesses will not contribute to slowing this trajectory and stunting the sector's growth opportunities.