The Chancellor delivered her first Budget of the Labour government. Much had been made in the months proceeding that tough decisions would need to be taken, and, at least in the short-term, the Budget announcements will make life more difficult for travel businesses.

Whilst it is welcome that business rates relief is extended for a further year, the reality is the 40% rate will represent a significant hike in bills for many high-street agents. Additionally, the cost of employing staff that the industry needs to thrive will increase for many travel firms.

Meanwhile, for customers, the further increases in Air Passenger Duty will be disappointing. While a £2 increase might not sound much, it brings UK air tax on economy flights to £15 per person, per flight. UK travellers already pay more air duty than almost all other countries, and it is one of a multitude of taxes and charges people often have to pay on their holidays.

The UK already charges the highest rate of APD in Europe. The Office for Budgetary Responsibility notes that APD is amongst the fastest growing of all taxes in the UK. The government must keep a close eye on the overall cost of travel to ensure that hard-earned holidays remain affordable for all.

However, there are some bright spots in the Budget for the long-term outlook of the sector. We welcome recognition from the Chancellor that high street businesses are vital to the economic health across the country, with the announcement of a permanently lower rate of business rates from April 2026, and also investment in the decarbonisation of aviation.

As Mark Tanzer, Chief Executive said in the statement to media responding to the Budget, ABTA members are responsible for the happiest weeks of people’s year, essential for all-round physical and mental well-being. The travel industry has made a remarkable recovery after the COVID-19 pandemic, and has bucked the wider consumer confidence trend in recent months with people continuing to spend and commit to their holidays.

ABTA research shows that the travel industry is well positioned to boost economic growth over the coming years – but to do that, we need the government to put in place tax, policy and incentive regimes that support businesses in the sector and their customers. We hope the additional pressures this Budget puts on businesses don’t slow down that trajectory and dampen the sector’s growth prospects.