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August 22, 2010

Global tourism body demands review of European compensation regulation

The World Travel and Tourism Council (WTTC) is insisting that the European Commission (EC) re-examine compensation legislation following the Eyjafjallajoekull volcanic ash cloud earlier this year. Its demand comes as debate reignites around how much airlines and tour operators should be required to compensate passengers.

“While passengers should certainly be reimbursed for out-of-pocket expenses, the fallout of the volcanic ash cloud is unduly impacting an industry that is already subject to excessive regulation and taxation,” said WTTC president and chief executive Jean-Claude Baumgarten. “This situation originated from force majeur and not as a result of mismanagement by airlines and tour operators. We believe it is time the EC recognises this and re-examines how the legislation is applied in such circumstances.”

WTTC believes that, while governments were right to take precautionary measures at the first sign of the ash cloud, restrictions went on too long and were undertaken without proper consultation with those most affected – the airlines and tour operators now having to meet the resulting cost.

“Tourism is being hit with a double whammy: the loss of business as planes were grounded and now the cost of reimbursing passengers. With evidence that some operators – particularly small- and medium-sized enterprises, which make up more than three-quarters of the industry – are struggling financially this year, it is an unwanted and unwarranted burden,” said Baumgarten. “We cannot help but think tourism is being punished for circumstances not of its making.”

According to WTTC, legislation is too prohibitive in its current form and does not allow for circumstances beyond the control of the aviation industry. Baumgarten made it clear that travel and tourism is not asking for a handout, but stressed it’s time to give the sector the recognition worthy of its size and economic importance.

“One of the biggest industries in the world, travel and tourism has real potential to drive economic growth and rapidly create employment opportunities in the future,” he continued. “But we rely on governments to consult with the private sector and develop measures to combat barriers to growth and help the industry thrive.”

As well as compensation legislation, barriers facing the industry include visa policies and processes, taxation (particularly the UK’s Air Passenger Duty), and infrastructure restrictions, such as airport expansion, while airlines also have to foot the bill for increased security measures at airports worldwide.

Representing the leaders of the world’s foremost private sector travel and tourism businesses, WTTC is calling on all governments and the European Commission to re-examine their policies towards the industry. The organisation points out that tourism is worth US$5.7 trillion to global gross domestic product and employs 235 million people worldwide. These are expected to grow to more than US$11 trillion and 303 million respectively by 2020.

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