EUROPEAN TRAVEL POLICY, 11 September 2002

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WTTC WANTS MORE EU ACTION ON TOURISM

EUROPEAN TRAVEL POLICY, 11 September 2002

Speaking in the European Parliament in Brussels on today’s anniversary of the terrorist attacks in the United States, one of the world’s leading tourism industry figures had no hesitation in accusing the European Union of not doing enough to rebuild tourism. Jean-Claude Baumgarten, President of the World Travel & Tourism Council, accused the EU of rejecting the private sector’s analysis of the damage the attacks had caused, in favour of a more optimistic assessment from the World Tourism Organisation – but he argued that the sombre realities were becoming more apparent one year later.

7.5% of travel and tourism demand had been lost in the two years 2001-2002 in the wake of the attacks, costing Europe more than 1 million lost jobs in the sector, said Baumgarten. He claimed demand in Germany was down $24.7 billion, in the UK down $20.1 billion, Italy down $15.4 billion, France down $15 billion, Spain down $7.9 billion, and the Netherlands down $6.8 billion. " The effects continue to be severe"; the losses in the EU are " disastrous for an industry already operating on tight margins", he told a lunchtime meeting of the European Parliament tourism group – a lunch that was twice interrupted by what proved to false fire alerts.

He was confident the industry could recover – "We will always bounce back", he said, predicting that EU demand would rise by 5.5% in 2003, creating nearly 40,000 new jobs – but there was an indispensable role for governments and for the EU institutions in helping that recovery. There is a role, he said, for the European Parliament "in ensuring that the EU makes travel and tourism a priority".

He repeated the consistent WTTC demands for overall improvements in the operating context for the sector: better infrastructure – EU airlines lost Euro 4.5 billion in delays in 2001, he said, revealing that a WTTC working party would be coming up with a new study on infrastructure needs before the end of 2002); VAT harmonisation, to iron out the distortions created by accommodation rates varying from 3% in Luxembourg to 25% in Denmark, and by the current options for three rates that member states enjoy ("I dread to think what will happen after EU enlargement", he remarked); and implementation of accounting methods to demonstrate tourism’s significance (but although WTTC would be presenting a new tourism satellite account to the UK later this month, he was, he said "disappointed" at the general hesitation being shown by EU member states in following up on the creation of TSAs that was a part of the Council of Ministers resolution on tourism adopted this summer). "We want 2003 to be a year of addressing tourism needs in EU", Baumgarten said.

"Ironically, the September 11 attacks a year ago helped create a new awareness of travel and tourism among heads of government", who recognised the importance of restoring its contribution to the economy in the wake of the attacks, according to the WTTC boss. "But this is fading away, so we have to keep momentum going", he added. The lack of a mandate for travel and tourism in the European Commission leads to fragmentation of effort, and the EU "takes months to react" compared to the rapid US action in subsidising airlines. On VAT "it’s not advancing at all". And on air traffic management, "We still have French resistance".

The European Commission’s director for tourism, Pedro Ortun, expressed sympathy for the WTTC priorities: infrastructure "is a key issue for the future", he agreed, but must be linked to its environmental impact. VAT is "delicate" – but "hopefully in the EU there can be possibilities, even if it is difficult". And on tourism accounting, " We are open to discuss any proposals on measuring the impact of tourism", he said. But "the main issue is political will – and some member states are not reacting in line with what they signed up to" in the Council resolution on tourism. There was a need for the European industry to exert pressure at national level.

European Parliament vice-president Jim Provan, who hosted the lunch, admitted that the EU "still hadn’t got the message" on the importance of harmonised air traffic management – and also speculated on the further complications that EU enlargement would bring without a rapid solution.

But Karla Peijs, his Dutch Christian democrat fellow-MEP, attacked the WTTC arguments as unrealistic. "Why don’t you consider yourselves as recognised?", she demanded. "You are part of the EU internal market… You are a very powerful sector but you are asking for the wrong things". She said the sector’s calls for more formal status in EU affairs or for special treatment on tax were misconceived. "Forget about getting a mention in the EU Treaty – it will never happen, so try something else; forget about VAT harmonisation – the UK and the Netherlands don’t want tax harmonisation… and the European Commission doesn’t want it, and Parliament can’t deliver it." Instead, she urged the sector to focus on what she said were more attainable objectives – such as, she suggested, seeking EU funding for promoting Europe as a destination.

The WTTC call for an effective EU response was taken up by other industry figures at the lunch. Tom Jenkins, executive director of the European Tour Operators Association, wanted a strategic response: "We have seen a catastrophic decline this year of 40% in incoming tourism to EU, with hotels slashing their rates by up to 80% to gain occupancy. We have bigger problems than VAT to address", he insisted. The collapses in international tourism in the wake of international crises in 1986, 1991 and 2001-2 "were unpredictable", he said. But, alluding to the prospect of another conflict in Iraq, he said: "We face another now and we should be addressing that". And Reinhard Petry of the European Spas Association said it was inadequate for EU institutions to disclaim responsibility for the tourism sector. "We are facing decline – and we can’t just say no-one is responsible. Even if the European Parliament does not have the decisive voice in constitutional terms for VAT or tourism, it is the duty of politics to take up problems and influence public and member states and to promote solutions – on VAT or whatever. It is important that politics plays its part. As electors, we cannot accept that the European Parliament allows itself to be dictated to by the other institutions", he said.

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