New research from ABTA – The Travel Association shows how the outbound travel industry in the UK is already delivering on the government’s plan to see growth and prosperity across the nations and regions of the UK.
It finds the outbound travel industry, which is responsible for millions of holidays abroad each year, contributes £57bn a year in GVA to the UK and supports 865,000 jobs right across the country. As highlighted in the new report ‘Outbound Travel – driving jobs and growth across the UK’ outbound travel has a strong growth record.
Despite being hit hard by the COVID-19 pandemic, the industry has bounced back well, and to a point where it has increased its economic contributions by 9.6%, since 2019, along with a 5.7% increase in employment.
The top five areas for growth in economic contributions and employment are also dominated by the regions, with the North East of England seeing the greatest contribution as a percentage of all economic activity (Gross Value Added - GVA), at 2.6%, and scoring second as a percentage of all employment (2.5%).
In terms of GVA, the top five are the North East, East Midlands, North West, West Midlands, and Yorkshire and the Humber. Meanwhile London comes top for employment with 2.6% of all jobs in the region connected to outbound travel, followed by the North East, North West, East of England and West Midlands (all 2.4%).
The report is being launched at the start of ABTA’s Travel Convention in Madeira, which last year was held in Magalluf, Mallorca, which brings together leaders from across the outbound industry to look at the future of the sector, exploring its opportunities and challenges, as well as what is needed from the new government to help the sector thrive.
It also comes at the end of a particularly tough year for travel, with the conflict in the Middle East affecting travel plans as well as fuel availability and prices. In addition, travel businesses have had to respond to climate-related events including wildfires, as well as the problematic introduction of Europe’s new digital border scheme, the Entry/Exit System (EES).
With the first Budget under the new Prime Minister and Chancellor just weeks away, ABTA’s message to government is to ‘work with us, not against us’ to help the sector to continue to thrive and grow, supporting communities across the UK.
As part of the report, ABTA outlines its ask to government including a fair approach to tax, in particular, a freeze to Air Passenger Duty (APD) and removing all children from the tax, which will not only help families with the cost of holidays, but also help to facilitate growth.
This is particularly important when you consider of those who said they’ll spend less on holidays next year (15%), the cost of living is the most common reason (52% up from 47% last year). ABTA also wants the government to look at business rates for retailers, recognising that travel businesses remain a fixture of the high street, with their presence helping to boost communities and attract customers to other local businesses. Many businesses found their rates went up earlier this year after the relief provided during COVID was removed and rates were revalued.
Mark Tanzer, Chief Executive of ABTA – The Travel Association said: “For many people, holidays are their most important time of the year, a special opportunity to make lifelong memories. But as an industry our value extends beyond these amazing experiences, as our research shows, making a significant contribution to communities right across the UK.
“But this doesn’t come easy, the geopolitical situation, climate related events and the wider economy have all had an impact on how people travel, and when they book. There is an increasing trend for people to book much closer to departure, sometimes just weeks before, which makes it very challenging for businesses.
“The recommendations we outline in the report would help to strengthen our sector and ensure that travel remains affordable and continues to be a driver of growth. It should also help to future-proof the industry, recognising that growth can’t come at any cost – while growing our industry we also need to continue the work to mitigate and minimise its impact, both environmentally and socially.”
The report also reveals that regions outside of London have a higher proportion of overall economic activity from overseas travel, compared to the capital. For example, the North East sits at 2.6%, closely followed by the North West, West Midlands, Yorkshire & The Humber, and East Midlands (all 2.4% of economic activity.)
The full report is available at www.abta.com/outboundtravel2026, and provides three policy pillars which the industry says will shape the future of the industry and help provide the conditions for future growth: Deliver a fair and competitive approach to tax.
A fair tax on flying: Aviation is vital for the UK’s travel and trading links globally, especially as an island nation. In an internationally competitive sector, such as aviation, taxes should be set at a level that ensures the industry contributes whilst enabling the UK to compete. Policy ask: ABTA’s Budget asks call for a freeze in APD over the lifetime of the parliament and removal of all children from APD.
A business rates system that supports the high street: The current business rates system is broken; deterring businesses from operating high street premises. A review which supports the high street whilst avoiding double-taxation for those operating in both online and offline environments is essential. Policy ask: review business rates for high street retailers to support businesses with physical premises.
Work and learning opportunities
Help young people work in Europe to gain vital skills: Destinations within the EU are by some distance our largest outbound market. Both for travellers and staff it is essential the government works with partners to remove barriers to travel and build better relationships that extend opportunity. Policy ask: complete a UK-EU youth experience scheme agreement, which would help to address challenges in getting UK nationals into tourism roles across the EU since Brexit (down by 69% since the UK’s EU departure).
Give young people the same opportunities other generations had through school travel: Educational travel is hugely beneficial for young people, offering learning experiences, language development, and cultural exchange. However, post-Brexit, new barriers have been erected making school trips to the EU more difficult. The government must prioritise this issue in talks with the EU and Member States, and push for reciprocal arrangements to facilitate educational travel. Policy ask: secure a reciprocal agreement with the EU to facilitate educational travel, including exemptions from digital border regimes to ensure the benefits of the Collective Passport regime remain in place.
Help provide more employment opportunities for young people and career changers: reshape apprenticeships, educational routes (level three), and vocational pathways into our sector. Policy ask: work with industry to ensure level three reforms (college age) work for the travel and tourism industry, including V-level and T-level qualifications that maintain clear pathways into industry careers.
Facilitate an industry fit for the future while keeping travel affordable
Keep travel affordable: As the industry decarbonises, the transition must be managed in a pragmatic way, which does not result in significant increases in the cost of travel. For example, the UK’s Sustainable Aviation Fuel (SAF) mandate should be reviewed regularly and adapted, as necessary. Policy ask: look at the requirements of the UK SAF mandate to enable use of first-generation fuels to avoid steep increases in costs for airlines.
Modernise UK airspace: One of the most effective ways of reducing the sector’s carbon footprint is to make tangible progress on long-overdue modernisation of UK airspace. This will also deliver significant benefits in terms of time savings and other efficiencies. Policy ask: make urgent progress on UK airspace modernisation.
Power the UK cruise sector’s transition: Shoreside power offers notable emissions reductions for the UK cruise sector but requires proactive cooperation and coordination between the industry and policymakers at all levels not only for installation but to address energy costs. Policy ask: drive down the cost of connecting to shoreside power and ensure that ports are prioritised when it comes to connecting to the grid.