Saturday, 9 April 2016

New taxes and £ slide pile on holiday price woes

Palma, Mallorca (courtesy Holiday Extras)
As if the slide in the value of sterling wasn't enough to take some gloss off your holidays, two major destinations are to introduce new taxes on travellers. At the time of writing the £ was worth approximately 12.7%l less against the euro than at its peak at the start of December. Blames the threat of Brexit for much of that. It presents those planning holidays after June 23 with a dilemma: should you buy now as insurance against a further potential weakening of the £ following a vote to leave - or hang on in the hope that a vote to remain will boost sterlings buying power? While you ponder this it it has emerged that the Balearic islands government plans to impose a tax of up €2 a day from July 1, to pay for various environmental and tourism infrastructure improvements. Not a fortune, maybe. but another £40 or so on a fortnight for two. To add insult to injury, it is now reported that VAT at Spain's lower rate of 10% will be added to the tax. I used the qualifying g words "up to" because the tax decreases with the level of accommodation. The €2 levy will apply only to five star and four star superior hotels. And Dubai, whose main airport handles more international passengers than any other in the world, will impose a new departure tax from the end of June. The charge of 35 dirhams - nearly £7 and the current exchange rate - will also apply to passengers in transit. This writer objects to tourist or airport taxes. Why should a one off or occasional visitor pay for developments that benefit their destinations? If the tx is necessary it should be paid by the host travel industry. A tax per head on visitors remains in place whatever happens to national or global economies. Obviously a tax paid by host industries will probably be passed on to visitors in good times - and the Balearics may argue with some justification that hey are currently benefiting from the ill winds which have buffeted Egypt, Turkey and Tunisia. But a tax on hoteliers, for example, may at least be absorbed during downturns. Meanwhile the European Tour Operators Association has reacted to talk of requiring US and Canadian visitors to apply for visas. According to an unidentified source this is a real risk. The story goes that the EU is upset that the US doesn't include citizens of newly joined countries - Romania, Bulgaria, Croatia, Cyprus and Poland - in its via waiver scheme. Tom Jenkins, ETOA's CEO, says: "At first glance this seems an act of shocking stupidity. The value of North American tourism to Europe is approximately $60 billion: it is equivalent in importance to entire export value of Europe’s automotive industry. It is wholly in Europe’s interest to ensure that this continues.Whilst the obligation of the European Union is to seek full reciprocity in visa treatment for all member states, even the chance that a visa regime will be imposed may cause real alarm. And alarm can destroy hundreds of thousands of jobs.Even at second glance, the reciprocity being sought is absurd: because some Europeans are being denied the chance to freely access American services, we will impose the same restrictions on Americans spending money in Europe. It would be an act of commercial self-mutilation on an epic scale." I agree. Mind you - there would be a silver lining for European holidaymakers, in that a dearth pf North American visitors would put heavy downward pressure on prices, especially in he most popular tourist honeypots.

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