Welcome to the Travel Monthly Review Show - March 2024 edition. In this episode we tackle:
Some industry news including Late’s pricing, Agent debt and industry associations
Spring Budget UK - The UK Government announced a range of measures to keep Britain financially fluid…we’ll analyse what they mean to the industry
In our monthly feature - we’re joined by Joss Croft, CEO of UKInbound, to look at trends of the international traveller market to the UK
Plus - we cannot end the show without our Quick Quiz
Featuring Will Plummer (CEO, Trust My Group), Claire Steiner (UK Director, Global Travel and Tourism Partnership), and James Clarke (General Manager, Travelzoo UK),
REFERENCES:
FEATURE TOPIC UK - Spring budget - election year
Air- passenger Duty: Air passenger duty on business-class travel is set to rise
Holiday lets: Completely getting rid of the Furnished Holiday Let scheme from April 2025,. This now means that mortgage interest will NOT be deductible
Abolishing Multiple Dwelling Relief from June
Freezing alcohol duty: The freeze on alcohol duty, which had been due to end in August, will continue until February 2025.
Employee and general business
2% cut in National Insurance This means employees were paying 12% in December, 10% January to March and 8% from April.
The self-employed will pay 6% from April.
Increasing the VAT threshold from £85,000 to £90,000 from April
Increasing the threshold that Child Benefit
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Programme Notes
This episode has been automatically transcribed by AI, please excuse any typos or grammatical errors
00:21 - Ryan Haynes:
Hello and welcome to the Travel Monthly Review Show, March 2024 edition. Back in their hot seats, Claire Steiner: will do a little celebration to recognise women in the travel, tourism and hospitality industry as part of International Women's Day, Will Plummer and James Clark will both be joining me alongside Claire Steiner: for this special episode where we'll be tackling some of the industry news, including late pricing, agent debt and industry associations. The UK government announced a range of measures to keep Britain financially fluid, so we'll analyse what they mean to the industry as part of the spring budget. In our monthly feature, we're joined by Joss Croft, CEO of UK Inbound, to look at the trends of the international traveller market to the UK Plus. We cannot end the show without our quick quiz. I'm your host, Ryan Haynes. Let's get on with the show.
01:19 - Ryan Haynes:
And welcome back then Claire Steiner:, UK director of global travel and tourism partnership. Great to have you back and happy International Women's Day for March.
01:29 - Claire Steiner:
Thank you very much and I'm delighted to be back. You've had me back.
01:33 - Ryan Haynes:
Oh, absolutely Now. I mean we've got to start off with you because, obviously, a moment to just celebrate and recognise women in travel. Here at Travel Market Life, ourselves are very proud that since the launch in 2020, we've been really trying to focus on inclusion and diversity among our guests across those four years, 27% of our guests have been female and in the last year it's risen to 29%. So, we're very proud of that achievement and I know it's still far off. But when we look at some of these numbers, it's quite interesting that women currently hold 26% of senior management positions in the hospitality, travel and leisure industries there, Claire. So still a long way to go for that 50-50 balance that isn't there.
02:18 - Claire Steiner:
Yes, there is, but you know what? It's getting better. I genuinely genuine believe is getting better.
02:24 - Ryan Haynes:
And what do you think are the initiatives that are really sort of helping bring that about and Great Brick, get that sort of confidence for women to really sort of take up those leadership positions and for people to actually open up those leadership positions to a wider diversity of people?
02:40 - Claire Steiner:
I think first off is awareness, isn't it? I think you know there's been a fundamental shift over the last certainly decade or so, whereby governments are introducing price parity, looking at wages, making sure that women are being paid the equivalent from a gender balance perspective. So those sorts of things are forcing companies' hands, particularly the bigger ones, and it's with the bigger ones that we think are there to really help showcase what's going on in the industry and what I'm loving and we're seeing, and I think we should celebrate in our industry how many women there are out there doing a fantastic job at a C-suite level with some bigger companies. I think as an industry, we embrace a lot of female entrepreneurs. We have an awful lot of small businesses that are run by women, but we're starting to see some real change at the top, which certainly wasn't there 20 years ago.
03:30 - Ryan Haynes:
Now, in recent years, particularly with the growth of work from home and offices not requiring that mandate for people to come into the office, there's offered that greater flexibility and that's allowed more women to be able to enter the workforce, particularly at higher level positions. So, what are some of the risks there or that could actually hold this back?
03:50 - Claire Steiner:
I think we've mentioned this in the last couple of podcasts a little bit. I think that there's no doubt that the increase in flexibility in working from home has been a real plus for women, particularly those with care responsibilities. They can fit it around those. However, as I said, I believe that there is going to be more of a mandate now for people to come back into the office more, and my concern with that is, if they don't maintain that flexibility, that will actually put a huge pressure on the women and we may then see them starting to rethink about where they are. So I think, yes, coming back into the office we all know is important from a social perspective and an integration perspective, but actually for those people who are used to working flexibly, we have to see if we can hopefully maintain that flexibility to allow them the opportunity to continue to shine in the workplace. Alongside those other responsibilities.
04:44 - Ryan Haynes:
Just another point is I was reading in the caterer the publication just last week that the biggest well, this is a quote directly from one of the women that we interviewed that she says the biggest blockage for growth is that women are not allowed to fail, because we have to keep up and be better. Now that's quite a big challenge really for businesses. What can be done really to try to get over that particular hurdle?
05:06 - Claire Steiner:
Yeah, I think there's a little bit of nature in that. We've spoken about this before. For me, one of the best things we can do from an industry perspective is look for mentors and male allies within the workplace. I think that that allows women to think differently or be guided differently.
05:27
For many years in recruitment there's been an old saying that women will only go for a job if they tick all the boxes, or certainly the majority of the boxes in the job adverts, whereas men tend to maybe have a bit more confidence and go well, I know I can do that. So even if I don't have the experience, I'm sure I can do it and I'll go for it anyway. But I do think that's changing. And I think that's changing because we're seeing women stand up as role models who are saying you know what, look at me, I've done it and holding themselves up as case studies, and that, I think, is where we're seeing the real change. We're seeing that change with women who are the role models, but also the men who are supporting them, and that's just as important. So, mentors, be they male and female, reverse mentoring everyone knows that that works as well and having some really great allies that can help support you and give you that confidence to drag you forward. So, I think it is slightly changing.
06:19 - Ryan Haynes:
Right now. You just returned from Berlin, and so has our other panellist, James Clark, general manager at Travelzoo UK. Welcome back. We're now sort of perhaps sort of exhausted and sort of sapped of energy. How was ITB?
06:35 - James Clarke:
Hello Ryan, hi Claire, it was fantastic it was. You know it's lovely being with so many people from the industry, you know, both meeting new partners and catching up with old partners. So, the event as a whole was brilliant and, even though it was slightly dampened at the end due to some industrial action in Germany, thankfully we all made it back, but it was a really positive few days.
07:01 - Ryan Haynes:
Excellent. Now let's bring some energy into the panel. He's been sitting at his desk all week going through paperwork and I believe as well, though, Will, you've got some exciting news to share with us from conversations that you've been having at the ECTAA Payments Summit.
07:21 - Will Plummer
Yeah, I'm the energetic one I've been marked. Thank you, Ryan. Hi everybody. Yeah, do you know what? The first ECTAA Travel Payment Summit in Belgium earlier this month in Brussels, and it was great. It was bringing together sort of regulators from European Union payment experts and it was a really good conversation, so the first one they've ever done. So, there were a lot of sorts of conversations going on, a lot of different things being spoken about, but it presents a real opportunity to get people together and actually merge together the payments and the sort of regulatory space. The package travel directives, the package travel regulations, which I know isn't everyone's cup of tea, but it's mine, I love it and it's going to help the consumer. It also then potentially helps the travel companies as well. So, it was great to have that conversation. Was sorry to miss Berlin but, as you said, I've been sat reading paperwork for last week and I didn't miss the strikes that all impacted your travel plans a little bit.
08:28 - Ryan Haynes:
Absolute nightmare when they brought down flights and trains and all that all at once, and it was pretty crazy on the trade show floor, particularly on Wednesday afternoon, as people started to panic about how they were going to get home. I, fortunately, managed to actually leave first thing in the morning on Thursday without an issue whatsoever, and then I understood, James, that it just got worse throughout the day.
08:51 - James Clarke:
It did. Yeah, I was one of those last stragglers leaving the airport late on Thursday evening, so next time I'm going to follow you.
08:59 - Ryan Haynes:
I know I missed the parties. I missed all the parties on Wednesday night. I was in bed by 9.30 because I had to be up at 3 o'clock in the morning.
09:07 - James Clarke:
I know our party was good. I don't know if I would.
09:10 - Ryan Haynes:
I don't know if I would wait which I think I'll stay on party after I've aged yeah, the risk of driving home that next morning was not worth it, so I thought, no, I'll be sensible. But I did hear there was some real. The parties are back in Berlin, which is great to have heard about. Right, we're coming up next with the news.
09:37 - Ryan Haynes:
Okay, in this section we look at three or four news stories that have been developing throughout the industry and get a bit of their take from our panellists. So, our three stories today will be looking at the late markets, COVID, deaths and then industry associations. The first one, trade, predicts strong late markets but warns keen pricing will be crucial. Haynes Travel owner Dame Irene Hayes told Travel Weekly demand for holidays combined with extra capacity bodes well for a strong late season this year. What are we seeing on your side then, James?
10:18 - James Clarke:
Dame Irene Hayes is correct. She's spot on. It's going to be a very, very buoyant late market. We talked about this on our previous podcast, but with the increased asset holders in the market with flights, and extra cruises, you know there's new markets have opened up swell. That together, adding a few of the other political and climate issues around the world, makes some markets more popular, leaves capacity in other markets and ultimately, they've got to be filled. People want bums on seats and they also want people on cruises and they want people in beds and hotels. So what that all creates is a very strong late market, probably one of the strongest late markets I have seen and the deals are phenomenal. They're incredible.
11:06 - Ryan Haynes:
No, I mean, it's just not undermining pricing within the marketplace. If you're sort of like massively dropping the price of a holiday or a package or whatever because you know someone would have bought at one price and then three months later, they buy it as significantly discounted.
11:22 - James Clarke:
Yes and no. So, if you're Mr Sensible, like a willy here who books his holidays, you know, two years in advance, he'd rather pay a slight premium so he can get his date and his seat on the plane and the right hotel room etc. So, he's happy to pay a premium for that. But if you're flexible, like maybe Claire or I last minute want to take her, be a bit of an opportunist, then next week we could be booking a very, very good quality holiday at a much lower price than maybe what we'll pay for I mean, we were talking just a couple of episodes ago about the fact that it had been really quite a boy in January.
11:57 - Ryan Haynes:
The markets were formed better than we'd expected them to and we were obviously a talk about this consumer spend and the fact that it isn't really affecting travel. But this sort of indicates that potentially there is quite a number of families that are really holding out for those bargains and the cost of living and obviously the sort of issue around sort of finances around the UK is tightening that much more. Is there more of a marketing ploy for some companies that they might just play to that? I don't think so.
12:32 - James Clarke:
Most companies would try to avoid creating their own late market. Ultimately, what everyone wants to do is have their infantry and their assets sold as quickly as possible. But what we are seeing in the market and we along with a lot of other businesses have reported the same which is, that February has been outperforming January, which is a very unusual trend, and I spoke to a lot of people in ITB in Berlin who shared that same stat that they've actually seen a stronger performance so far in February. Potentially that might be because of post-payday, which was obviously very late in January, but yes, the performance has been strong in February, so let's see how that goes.
13:14 - Will Plummer
I was going to ask James a question, if I may, Ryan, and he doesn't know me well enough because I would wait for the deal. If I'm quite honest, I think the danger with this late market is that then, going into 25, that's going to be the expectations and that's actually going to put a lot of pressure on businesses in terms of getting that cash in, getting those bookings in for the early season and everyone's going to wait for the late. I mean, how do you see that, do you not see with the pressure? So, I think we've all recognised doom and gloom here, constantly harping back that actually it will have an effect going into next year. So, this year, great boy and provided prices, good, it's great. But it's a real danger for the industry.
13:56 - James Clarke:
It is your, you.
13:57
Your assumption is correct Because if we look back to 2018 2019, when the last late market was really strong, what that few years over COVID did was actually reset and as everyone came out of COVID, everyone wanted to secure their holidays far in advance because they knew where they wanted to go.
14:15
They wanted just to book. So, it went kind of back to this old routine of everyone looking as far in advance as possible and there being very little late market. But because of the amount of capacity in the market and because of the deals, people now consumers are like sitting there saying, well, these prices continue to go down, and if you're sat there watching maybe a cruise and it's on a website and it's getting reduced, reduced, reduced, or you're seeing air, for air bears are very reasonable in peak season, thinking, if they're reasonable now they could have probably even get cheaper. Because, what you know, that's the opposite effect. So you are right in your assumption and it could fuel kind of a bad trend for the industry because ultimately, people want to sell their stock as quickly as possible in the market so they can focus on other areas.
15:02 - Ryan Haynes:
Excellent, Now let's. Let's just have a question to you guys what's the latest foreign holiday trip you've ever booked?
15:12 - James Clarke:
I think for me, bear in mind I've been in the industry. I booked a holiday probably about 10 days out Okay, not as late as I was expecting I can tell you how cheap it was, because I was working for the tour break at the time when I bought airfare my return airfare for £79 return that included bags and flights to Egypt, and I got my hotel for £110.
15:35 - Ryan Haynes:
Wow, how long ago was that? It was a far while ago.
15:39 - James Clarke:
But yeah, so that was the cheapest deal I've ever booked. But that was me getting obviously, net rates in the market. But yeah, £79 to Sharm El Sheikh return.
15:48 - Ryan Haynes:
Oh, amazing I Claire. How about you? I mean, you're quite a traveller.
15:53 - Claire Steiner:
I can definitely beat that, but mine goes back a long time when I was in my late teens and a couple of girlfriends booked the day before we flew out, so we literally did a 24-hour turnaround.
16:03
That was that and we were so lucky because, because we booked late, I remember it's clear we went to Greece, we went to this island and because we booked late, we weren't putting the big hotel with all the balconies. We were given the little private residence that they have for late people. So, we ended up with this beautiful little private residence and we booked at about half the cost of everybody else who was in the hotel down the road. So we were very happy. But that was a one-off.
16:28 - Ryan Haynes:
I have to say. What will I mean? Are you going to prove James wrong?
16:33 - Will Plummer
I'm not quite sure that I did it for price reasons, but we booked February after and we took the family to Paris and we booked four days before. Just hotel we got a good deal Eurostar not. So, it really, I'm not sure I necessarily. Maybe I'm going to have to come back to what I said before. I'm not sure I necessarily booked early, but I'm not sure I booked late based on price me it's more convenient and what's going on in my life and what I can fit in. So yeah, I think different people have got different attitudes about it, but I think we need both markets and too much late isn't good either.
17:13 - Ryan Haynes:
It's actually one thing I want to try and do this year if I can, and actually book a last-minute holiday, like literally right down to the bone. So, let's see if it works out and I'll tell you how it goes. There's your challenge. It's my challenge for this year. Right, okay? Next story Nearly half of the Advantage agents are still paying off COVID debts.
17:31
Nearly half of independent agents still have COVID-related debts and almost a third say high interest rates are affecting their businesses, according to a survey by the Advantage travel partnership members.
17:44
This is quite a concern since we have four years since the start of the pandemic. Now, believe it or not, that's moved on very fast, but people still massively waited, by the cost that of implications that came with it. Actually, we've been trying to get the market moving and the question is where people selling off holidays just too cheap in order to get the bookings coming in in 2020-21, which is how they on this knock-on effect, are we now at a point where there is too much capacity and therefore travel agents are going to have to continually try to sell their holidays and just make a meagre profit and that then have an impact on them being able to pay off their debts. It's going to be an issue, isn't it, for the industry If all these travel agents are going to have so much money that they've got to pay back and may not. I mean, I know we're already seeing quite a number of small businesses massively struggling this year as a result of the fact that people are cutting back so much in their expenditures.
18:48 - Will Plummer
Yep, here comes the cynic on it. I think what happened after COVID was, to be honest, some travel businesses that perhaps shouldn't have survived if I'm being really harsh were able to because of the bookings, because of the volume of the bookings that came in, and we didn't see quite the level of failures that I think I certainly, for one, expected. And now you know, we've all acknowledged the last year has been brilliant. The bookings are coming in. That's fantastic. I'm actually surprised that it's so high, but that's just an advantage. You've got lots of other agents and operators that have been affected. We're now talking about, you know, these massive late markets. Then you know deducting, discounting, rather all these packages. We've got higher interest rates; we've got higher costs. I can see the potential for real pressure coming in later this year and I think that is greatly concerning for the industry and something that needs looking at very quickly.
19:49 - Ryan Haynes:
Okay, over to the third story, then the new global travel tech association launch. So, this is made up of Amadeus, Booking.com, e-dreams, Expedia, Skyscanner, our travel port, which it brings all these guys together as a way for them to empower. They're meant to be empowering travellers by enabling unparalleled transparency, competition and choice in the travel industry and actually have global policy decisions on these. Now this is also meant to help as part of the technology infrastructure and an ecosystem of the industry that companies can access. What's this? Non-discriminatory access to data intermediaries, digital platform issues, including data privacy and fair digital taxation, as well as regulatory sustainability issues. I mean, have you ever worked within these travel associations? Is this just, do you think, a commercial ploy to make it look like these are the big boys all working together and you need to be in this league in order to play part of it, or do you think that there is actually some sentiment behind industry associations like these?
20:59 - James Clarke:
So, from my perspective, I think the proof's now going to be in the pudding because you've got like you said, some of the biggest stakeholders around the table. So let's see how they deal with the first challenge along the road. I've got nothing against them forming this alliance, in a sense, and creating a group of probably the most powerful tech businesses in the travel industry, but they talk openly. This comment is around not just how they deal with some of the challenges, but also, if a crisis was to occur in the industry, how would they work together. So, really, for me, it's let's not judge them before they're able to show us what they're able to deliver as a united team. But there are lots of groups and associations in the industry that do a lot of good, so let's just hope they're going to join that list.
21:47 - Ryan Haynes:
Are there any particular associations, James, that you guys are part of, a couple that you feel really add a lot of value to the industry?
21:56 - James Clarke:
Yeah, from our perspective, there's Partha, there's Clare, and we seem to be joining another association which I'm going to stay tight-lipped about and that will be coming out, hopefully, on our next podcast. But yeah, I think all of these bring a huge, huge worth to the industry. If you look at some of the largest associations, their aims are always to try to be very good middlemen and matchmakers, and I think that's where you get the most worth out of it. I've always said that in any kind of association that we join, not only do we want to bring something to the table, but ultimately, we also want to walk away with a new alliance a new friendship or a new business connection. So, for me again, I'm a big advocate of these.
22:41 - Ryan Haynes:
Now Will I know? You're involved in quite a few as well, aren't you? Associations? Where is the value that you look for when identifying the ones that you will play a part in?
22:53 - Will Plummer
I think it's to do largely with their member base. For us and I think certainly some of the ones that James has mentioned were also members of that connection, meeting people, shared experiences etc. Is absolutely vital and it's part of what makes up the travel industry. I think, as James said, the proof is in the pudding for this one, the fact that technology is slightly different from a partner, a latter, a clear. This is actually in the way the industry is going, the way data is playing such an important part in everything that we do.
23:33
Yeah, I don't know where this one's going to go, because we're talking of a lot of big names here who control a lot of the market. How inclusive are they going to be of other people? How inclusive are they going to be in terms of innovation, or is that going to be a block to a lot of things? There is actually a good example in the tools and activities space. It's Octo, which I think is an open connectivity travel organization, and where they've worked really hard in that is actually standardizing APIs, documentation etc with these reservation platforms to simplify the sort of integration to the OTAs and get that distribution there, and that's been very successful. But that's a smaller part of the market.
24:21
So I welcome it from the perspective that I think organizations have a lot of value in terms of helping with what you said. You know, in their spiel and the regulatory side of things the simplification, the taxation being a little bit cynical that seems to be the theme. I just wonder how inclusive, because there are a lot of wonderful small and medium technology companies out there who've got probably more innovation because they can do it. Are they going to be open to being inclusive of it? And that remains to be seen.
25:04 - Ryan Haynes:
Okay. So now we're going to look at the spring budget, a big announcement in an election year for the UK. How much it affects things internationally, I guess may yet to be seen, but there were a few items on here that a related directly to the travel, tourism and hospitality market, but then there are also some that really help people and businesses in general. So really just focusing on then. Firstly, on the actual industry side of things, we had the air passenger duty Now he announced an increase in airfares for business class travellers to raise some revenue and then holiday lets they completely got rid of the furnished holiday let scheme, which will end in April 2025, which really helps in regards to mortgage interest rates not being deductible as it previously was, as well as the cost of furnishings for the property not being tax deductible as well.
26:04
In addition, they are abolishing the multiple dwelling relief, which could, in fact, have a major impact on those companies that have been looking at growing their portfolio and buying multiple properties. And finally, freezing alcohol duty, which was due to end in August, but this will continue just for another year, until February 2025. But let's see how much that will actually benefit the pubs clubs and hospitality across the UK. So those three things, where do you stand, particularly within the travel side? How do you see that, Claire I mean you're a business class traveller is it going to affect you paying a little bit higher premium prices there?
26:50 - Claire Steiner:
I don't often turn left, I have to say, and I think you know, and I know the other two will have a much more in-depth, I guess, viewpoint on this but it's just more tax, isn't it? I mean, it's just this, seems to be just this, the stealth tax of the government, and they're just increasing it all the time, and it feels like a bit like low-hanging fruit to me. So, it's not going to affect me hugely because I don't tend to travel business class, but you know, I think that's one of the things that probably people aren't very happy about if I'm absolutely honest.
27:22 - Ryan Haynes:
Oh, I mean, wine and beer aren't going to be as expensive as they were perhaps expecting it to be. So that's one good thing, though, isn't it? We can still have our parties at a reasonable.
27:34 - Claire Steiner:
And the hospitality industry, do you think, is quite pleased with that? I think that's meant quite a bit to them, particularly as they are like we all are, though we're talking about struggling coming out of the pandemic hospitality, really still struggling in that respect, so anything that helps them is a good thing, even if it is just for another year.
27:49 - Ryan Haynes:
Right though. So, James, what's your thoughts here? Clive Raton of BTA said contrary to common misconceptions, business travel is not just for the wealthy. This tax will hinder growth for small and medium enterprises by limiting international collaboration opportunities.
28:05 - James Clarke:
So I actually do have quite a strong view on this one, and I actually think the increase in APD was a terrible move.
28:13
It's the highest aviation tax in the world that we are faced here in the UK with. It's also one that's gone after. It's low-hanging fruit like Claire said. So, they've gone after an easy win, but actually, it's given one hand taking the other and actually, it's the wrong audience to be taken from because it ultimately means if it's from a business, they're going to have to try to find those costs somewhere else, which ultimately comes back to the consumer. So, it goes all the way back down to, you know, Mrs. Smith, on the street. And the other area that I feel that it's actually affecting is that we're an ageing population from what we look at, from us at travel. So, there's a large proportion of our audience who are retirees, who are going on those longer holidays, who are travelling in business class, who are going to say look, this is a once-a-lifetime trip. You know, some of these increasing taxes per seat can go up to about 200 or 300 pounds extra.
29:12 - Joss Croft
That's a lot, that's a lot of money.
29:14 - James Clarke:
We're not talking about a few pounds here. 200 or 300 pounds more per person is a huge amount. Now why are we going after the wrong people here who are maybe doing that once-a-lifetime trip? You know there are so many other areas we could have gone after, so I'm disappointed by that. I think that was a low blow for the industry. On the plus side, if we are just to look at very quickly about not increasing the surcharge for alcohol, I think that will help the leisure industry in the UK. I think that's a good point to make this summer because ultimately, they've gone through a really tough time the last few years and I think that would have been a low blow for them had there been a three or four-P increase because again they're going to have to pass out onto the consumer. So thankfully that's been kept flat.
29:55 - Ryan Haynes:
I'm going to say. I mean, even the British Institute of Innkeeping has warned the freeze may not be enough to help struggling landlords who have seen huge inflation in every other area of the business. You know it is an industry that is particularly struggling right now. We're seeing clubs obviously close all across the country. We just don't have the young, young people going out as much as they used to. That dynamism has massively changed, particularly in the nightlife in towns.
30:21
One of the interesting areas I particularly find this holiday lets. I think, as a result of this and people can't cash in on their mortgage interest rates and, you know, refurnish their property and be able to get that that claim back, we're going to see a lot less Airbnbs on the market. I think a lot more people are going to be massively pulling out of that because it's just not affordable. We've seen it with the by-to-let-by. You know I was a by-to-let landlord painful. It's so painful now to be a buy-to-let landlord with the fact that you can't actually, you know, make as much claim for tax relief as possible and you've got loads of licenses that you need to pay for. Now I just see that Airbnb markets next Will when it comes to this area. Then, within the budget, what's your thoughts?
31:09 - Will Plummer
Initially, I thought, oh, there's sort of not much here. But the more I've reflected on it, the more I don't think it's good for the UK travel industry, both, to your point it's, in terms of, you know, inbound and the ability for people or the willingness to Airbnb and do the short-term rental side of things. But a little bit, you know, to James's point around that, you know the air passenger duty. I think I saw one number which was for a long-haul premium economy. It went from about 25 pounds to 225 pounds and okay, we can talk about sustainability. You know the responsibility of airlines to, you know, charge more for these business cost passengers to try and meet their net zero.
31:54
That's a different conversation altogether. I think what this says is basically we're going to make it really hard for the UK to be the centre of sort of I don't know global travel. You know if you think most of the airline's profitability is made up of turning left and that is the money that is probably needed to get, you know, sustainability into that, you know it's counterintuitive and it's really not good for the UK travel industry. You'll to James's point, you penalise the wrong people. Okay, that's fine If the goal was to sort of increase the inbound market, well then, you're then taking with the other hand on the short-term rental market as well. So, I don't quite see it. Maybe the travel industry is not the big vote winner, so we shouldn't worry about that. But the freeze on the alcohol is probably a bigger winner. National Insurance, which I'm sure Claire's got more thoughts about, is again probably that does benefit us as an industry. But actually, looking outwardly, I don't think it's as positive as I think it was. I think it's bad for UK tourism.
33:09 - Ryan Haynes:
I mean it's interesting, I don't think you actually listen to businesses, because the government refused to scrap the tourist tax and they didn't make any amendments to the VAT for hospitality, which is the second highest across Europe, which is just ridiculous. But looking at the employee and general business, so, Claire, I'm 2% cut in National Insurance, an increase in the VAT threshold from 85 to 90k from April and an increase in the threshold for child benefits.
33:40 - Claire Steiner:
Yes, it can only be good. I mean, I think, listen, businesses and individuals are going to be much happier with that. It means more money in their pockets, particularly, I think, for parents. I think the child benefit, anything we can do to support our parents, goes back to what we were saying about helping people in the workplace, helping mums in the workplace. All these things come together. I'm very happy as well. I know my clients will use this as a positive, see this as a positive for helping with just, I guess well it was all about the cash flow, wasn't it? But yeah, keeping people happy, I think those are wins. I think a lot more could be done. I mean, I thought it was a bit of a blue budget myself. I didn't think there was anything that made me jump up and down again, though I was pleased to see the NI changes. That was probably one of the few things that would have smelt to my face.
34:37 - Ryan Haynes:
I mean I was just. I just think. I just roll my eyes again and think this VAT threshold is barely gone up, especially in regard to the whole cost of inflation. How many people who are living in the travel and tourism, hospitality industries that are self-employed or you know they've got a small business that they run seasonally and they re-are and you have to buy so much in you don't make much. You might have a lot of revenue coming in, but where's the profit sometimes? And all of that, and that is the biggest issue that I think I had that conservative government that is meant to be very much in touch with business and commerce.
35:18
I just wish that we had seen that VAT threshold go up in returns that are more related to inflation and actually respect and honour the hard work that business people do and the reasons why people actually run businesses. But here we are where we are. I say we are one of the lowest national insurances since they've dropped that for the second time over the course of the year. So, I'd say employees at least are going to be somewhat better off, even though it may even out across inflationary terms as well. Right, as I say that has been the spring budget. I mean it's come and gone. I guess we'll get you know, see how that actually plays out during the course this year and what impact that actually has on the election. So coming up then we have an interview with Joss Croft, the CEO of UK Inbound, to talk about the inbound trends and what he's seeing. I start by asking him about the developments that he's witnessing in the market.
36:30 - Joss Croft
So, the good news, I guess, is that we're moving from recovery into growth, definitely, but we're probably lagging slightly behind our competitors. Last year was a very strong year and of course, you've got to remember that of course, inbound tourism, particularly inbound tourism, was the first hit by the pandemic, probably the deepest hit by the pandemic and potentially also one of the last to come out of the pandemic because we had all of those restrictions in terms of how people could travel. But actually, huge pent-up demand and 23 was a pretty good year, lagging slightly behind 2019 as we move into 2024, we're still not quite going to be there in terms of the spend compared with 2019 in real terms. But of course, there's an inflationary effect there. We're starting to see visitors come back and bring in their foreign exchange, which makes us the second-largest service export industry. So really important to bring that foreign currency to the UK.
37:28 - Ryan Haynes:
Really interesting. Let's look at the source markets. Where are you still seeing things for 2024?
37:34 - Joss Croft
Yeah, so the USA market is absolutely the standout market for the UK at the moment. North America is a whole Canada, of course, an important market, but the USA was really very, very strong for us. Now, a lot of that was because people in the States, when they weren't able to travel over the pandemic years, were issued with what's called future travel credits, so they've been able to use those. But don't forget, of course, that the USA is our number one market. It's worth more to the UK economy and more visitors come to the UK than from any other market. Europe is probably a little bit slower than we'd have liked and, again, we've still not really quite seen the Germans and the French that make up the number two and number three markets in terms of volume. We've not had that lift from the air capacity into the UK that is coming back.
38:25
China was our second most valuable market, not in terms of visitor numbers, but in terms of the amount of money that they spent in 2019.
38:33
That's been a little bit slow and, of course, some of that is, as I say, to do with capacity.
38:37
It's also the fact that British Airlines certainly can't fly over Russian airspace, but we're seeing a lot of really strong recovery from China this year. I think where we're perhaps missing out a little bit is obviously shopping as a key motivator for travel out of China, but of course, we saw the removal of tax-free shopping for visitors to the UK in 2020. So overall, I think we're looking for another really positive year out of the States that continues a strong demand there. Wider GDP growth in the UK is likely to be at about 0.6% this year. Inbound tourism is running at 4% in real terms, and 7% in nominal terms. So really inbound tourism is a real driver for the economy and I think, taking a slightly different approach with governments, having had two, three, very, very difficult years and obviously a lot of pushing government to support the industry, I think we're now in a position to turn around to government to say that actually we can be one of the solutions for some of the problems that the UK economy faces.
39:40 - Ryan Haynes:
I mean, there are obviously challenges for inbound tourism. What ways are you sort of looking at those challenges and addressing those and how can we start to alleviate those and start to get more money coming in? You know, more spending really.
39:54 - Joss Croft
And we identified what some of the biggest barriers to growth were. And the first one, you're absolutely right Rising costs 63% of our members said that staffing costs, inflation, and energy costs were really acting as a drag on their ability to drive profit. And that's the key bit because, whilst you know, whilst the spend is coming through, because there have been huge cost rises, that's really putting pressure on people's margins Staff recruitment and retention 45% of members saying that that is a big barrier to growth as well. So you know, we've got those supply-side challenges. On the demand side, I mean, funnily enough, there really is still strong demand. And that's in spite of everything, because some of the government policies that we've got at the moment in terms of the visa costs the visa costs have gone up, Went up very recently.
40:44
We still have very high levels of air passenger duty. Of course, VAT 20% is not very gated like it is in other European countries. In fact, actually, VAT we have the highest rate of VAT in Europe, apart from Denmark, on accommodation and all tourism is kind of defined by means, money and motivation. So, have people got the ability to travel here? We talked about, you know, lack of air capacity out of Asia, for example, we’ve also got you know we still haven't been able to build additional runways, whilst the rest of the world cracks on and builds more runways to build more capacity into the system.
41:22
You look at the motivation. Actually, you know we've had the sad passing of Her Majesty the Queen, but that put us on the front pages of every newspaper around the world. But again, we've just got to be careful. Our reputation for welcome is perhaps not quite what it was. Certainly, after the 2012 games, we were about 11th in terms of world rankings on welcome, with now down to 19th. So, we've got to make sure that when the visitors do come, that we're giving them a fantastic experience, memorable experiences that they can go back and tell their friends and family about. You look at those where, where, which parts of the country are seeing that real growth, and you know the fact that Scotland is doing so well. You know some of that is probably down to the fact that Scottish businesses in band businesses did receive a lot of support that maybe English businesses didn't receive, and that's probably allowed them to go out and prospect for more business as well.
42:12 - Ryan Haynes:
I wanted to go back to a point that you mentioned, and I'd like us to just extrapolate that a little bit more. This thing is called the welcome. You say that you know we've slid in the scales there from 11th to 19th over the last 10 or 12 years. Can you describe to us what we mean by welcome and what is expected to of guests to the UK?
42:34 - Joss Croft
Ok, so welcome is one of the most critical parts of the offering. We know that when people travel, the number one is whether they get value for money and the number two is whether they feel that, whether they're going to be welcomed or not. We also know from the Civil Aviation Authority they undertook a study a couple of years ago that demonstrated that those people who do feel welcome in a destination are more than twice as likely to recommend it to their friends and family as those who don't. So welcome is an absolutely key part of the modern travellers offering. We have a bit of a reputation for being a bit stiff up a lip and a little bit unfriendly anyway, but really, it's absolutely critical because, as I say, word of mouth is such a key form of anyone's marketing channels. It's the cheapest one, you get it right, people will tell their friends and family and they will come back again, and it's some of the things that within that kind of welcome is.
43:35
We're not necessarily very strong at it. Language skills, for example, and again, Ryan, you and I were having a chat before we started the pod actually, but a lot of Brits don't speak those languages. It's not enforced that people have to learn modern language these days and people, particularly modern-day travellers. If you're kind of a premium destination, which the UK is, we're not cheap and cheerful. We are good value, but we're not the cheapest destination.
44:02
We need to really make sure that those visitors receive the best possible experience that they can in the UK, and that might mean being able to speak their language when they arrive on your doorstep. There's a secondary issue, of course, that a lot of my members are actually contracting internationally as well and they need languages to be able to contract in German, Spanish and Italian. And, of course, finding those workers who have the languages in the UK is a real challenge as well. So welcome plays a really key part in people how they experience the UK. We know that it's a key driver for business as well, so we've got to get it right.
44:37 - Ryan Haynes:
Now, before we do go, I'd love to learn a little bit more about the UK inbound as an organisation and really for our listeners. Who should consider being a member and why? Please, Josh.
44:48 - Joss Croft
Sure. So, we were established in the late 1970s as the British Incoming Tour Operators Association and the tour operators. These are destination management companies. They package up the UK and they then sell it over to businesses overseas. They handle about 30, 35% of all the travellers that come to the United Kingdom use a DMC. So, we have about 120 of those within our membership and then we have a further about 280 businesses who want to work with tour operators and we really offer sort of two or three areas, the first of which is we offer that connectivity between operators, buyers and the suppliers attractions, hoteliers for them to meet and do business.
45:32
Being able to put the two together is a really important part of our work. The second part of our work is making sure that everyone's aware of the issues. So being at that kind of trusted source of information is really important for our members. The third area is kind of lobbying and advocacy acting as the voice for inbound tourism, so making sure that our voice is heard. We've been able to influence government policy on things like those ID cards. We're working very closely around things like the letters. We'd like to see transit passengers excluded from the electronic travel authorizations that will be coming in later this year, and also, of course, we like to have a little bit of fun in the bargain as well Ryan.
46:10 - Ryan Haynes:
Excellent. Now, I believe, that you might be able to participate in some of that fun at the annual convention which is actually being hosted in Liverpool this year on the 25th and 26th of September. What can we expect and what are the key talking points?
46:23 - Joss Croft
We will have a keynote speaker. Last year we had kind of eminent sports psychologist, Jamil Koreshi, talking to people about how they can improve their performance. We're just finalizing our keynote speaker for this year. We will hear insights from our old friend David Edwards from Scattered Cloud, who kind of brings kind of data into real insight, actionable insights. We'll have a networking evening and networking opportunities across the three days. We'll have a destination showcase. One of the key things for us is that we actually on Thursday we have a full day B2B, so that allows kind of speed dating across a desk between a buyer and a supplier. And then on a Thursday evening, we go into a gala dinner and awards ceremony the awards for excellence, which recognizes excellence within our sector. We hope it will be the having built on last year, which was our biggest attended event in Belfast. We're very hopeful that we'll be able to bust those numbers for this year as well.
47:21 - Ryan Haynes:
Excellent, Joss. Well, good luck with that. I hope it all goes well and look forward to having a follow-up conversation throughout this year, but thanks ever so much for joining me on this podcast today. It's been my pleasure, Ryan, thanks.
47:40 - Ryan Haynes:
Okay, here we are for the quick quiz. The best of the five were our panellists who had challenged their industry knowledge. Okay, they've all got some sort of noise maker. Let's hear them. Starting with Will, this week has a...
Will Plummer
(Rings a buzzer)
47:55 - Will Plummer
Can you hear that mate?
47:56 - James Clarke:
That's really bad, that's not good… That's good. That's good. Ryan let's not give him any more advantage, OK?
48:00 – Will Plummer
I can't turn it off now.
48:05 - Ryan Haynes:
Have you not got a buzzer, like Claire had last week?
48:07 - Will Plummer
No, I can't find it, I'll just clap my hands.
48:11 - Ryan Haynes:
Oh, we had a clapper last week. Okay, Claire?
Claire Steiner:
(Rings a bell)
48:18 – Ryan Haynes:
Brilliant, this is the tiniest bell I've ever seen in the world. That's unbelievable, but it makes a fantastic sound, though you can actually hear it.
48:26 - Will Plummer
I miss my bell
48:27 – Ryan Haynes:
And James?
48:29 - James Clarke:
To the biggest bell, the Travelzoo’s famous bell. (Rings a bell)
48:33 - Ryan Haynes:
There we are. It's more like a gong the way that sounds in compared to Claire, but absolutely wonderful, I've not seen anything that big either, James, so great. So, Claire, James and Will, are we ready for the quick quiz? Here we go, geography to start off with China shares the world's longest land border. With what country?
Will Plummer:
(Rings the bell)
48:55 - Ryan Haynes:
Will?
48:58 - Will Plummer:
Russia
49:00 - Ryan Haynes:
No
49:01 - Ryan Haynes:
You're out. Do you want to steal the point, Claire or James? 3, 2, 1… It's Mongolia, nearly a thousand kilometres different to Russia, actually. Okay, second, attraction the air distance between Las Vegas and the Grand Canyon's West Rim is approximately 130 miles. How long does it take to fly between the two in a helicopter?
James Clarke:
(Rings the bell)
Ryan Haynes:
James?
James Clarke:
35 minutes,
Ryan Haynes:
35? Claire?
Claire Steiner:
20.
Ryan Haynes:
20. Thank you
Will Plummer:
(Claps his hands)
Ryan Haynes
Go on then, Will
Will Plummer:
12.
49:54 - Ryan Haynes
Well, no, 40 to 45 minutes, so. James wins that one Good one. Well done, James. There you are. Now you can start planning your trip to Las Vegas. You see, right Airlines, what is the oldest international airline still in operation today?
Will Plummer:
(Claps his hands)
Ryan Haynes:
Yes?
50:09 - Will Plummer:
Lufthansa
Ryan Haynes:
No
50:15 - James Clarke:
Oh, that's a good guess.
Ryan Haynes:
Yes, Claire?
50:20 - Claire Steiner:
I'm going to tell you the Cathay Pacific.
50:26 - Ryan Haynes:
No, James, do you want to have a guess at this one?
50:31 - James Clarke:
I'm going to go with KLM.
50:35 - Ryan Haynes:
Yes, KLM, it is Well done. That was set up in 1919, just beating Qantas in 1920. So well done. Okay, James, in the lead of two points, we move on to history. In 1970, Bernard Sado invented what is today a must-have travel accessory. What was it? Can I give you a clue?
Will Plummer:
What was the date? Sorry,
Ryan Haynes:
1970.
James Clarke:
(Rings the bell) I'm going to take a guess.
Ryan Haynes:
Go on then.
51:14 - James Clarke:
Was it an inflatable neck collar?
Ryan Haynes:
No.
51:22 - Claire Steiner:
I'm going to get it. I'm about a wheely suitcase.
Ryan Haynes:
Yes, Claire, well done.
51:30 - Ryan Haynes:
Nice to take the clue would have given it away. He was president of the US Luggage Corporation. Yes, you're welcome, Right? Final question, then, where we have James at two points, and Claire with one, could Claire come in and steal this from James? Destination question which country has the most UNESCO World Heritage sites?
Will Plummer:
(Claps his hands)
51:53 - Will Plummer:
Yes, India.
51:57 - Ryan Haynes:
No. Claire?
Claire Steiner:
Greece?
James Clarke:
(Rings the bell)
52:00 - Ryan Haynes:
No. Go on then. Is he going to steal it? Is he going to steal it now with three? Go on, James. It's not the UK, is it?
Ryan Haynes:
No, no, I thought you were going to get close there when Claire mentioned Greece. Italy with 58.
52:25 - Ryan Haynes:
There we are, okay, well done, James, congratulations.
52:30 - James Clarke:
We just have a quick recap. How many points did we all get?
52:35 - Will Plummer:
Sorry, can we just have a quick recap? How many times have I won this quiz?
52:39 - Ryan Haynes:
Yeah, Will has won two games to James's one.
52:43 - Will Plummer:
I mean, I'm lost without my bell, but I'll be back.
52:47 - Ryan Haynes:
That's the reason why isn't it?
Will Plummer:
It's exactly. The kids have lost the bell.
Ryan Haynes:
Guys, thank you ever so much. It's been wonderful having you back here again for our March edition. Thank you for joining me.
52:58 - Will Plummer:
Ah, thanks Ryan.
James Clarke:
Oh, thank you, Ryan.
Claire Steiner:
Thank you, Ryan. Catch you next time then. Bye
Ryan Haynes
Thank you, guys.
53:04 - Ryan Haynes:
Thanks for listening.
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