Wish you were here? Postcard from QE II CC Westminster

January 27, 2008 at 5:04 am | Posted in Aviation, DfT, Economics, Flight frequencies, Heathrow, Heathrow airport, Heathrow expansion, Public Consultations, Public exhibitions, Runways, Tourism, Transport | 5 Comments

Greetings from the Department for Transport’s Public Exhibition at the Queen Elizabeth II Conference Centre Westminster!

DfT Public Exhibition at Queen Elizabeth II Conference Centre Westminster 25 and 26 January 2008

Dear Atmoz,

Thanks for drawing attention to proposals for ‘Adding capacity at Heathrow airport‘ once again in your post Heathrow Expansion: Supply and Demand. As we are now in the final month of a public consultation on proposals for expanding Heathrow airport over the next couple of decades, the complete consultation document (curiously filenamed completecondoc.pdf) deserves to be studied widely and questioned deeply.

Figure 1. on page 29 of the Consultation Document shows that there are currently two runways:

  • The Northern Runway
  • The Southern Runway

The extra runway is referred to in official documents as:

  • The Third Runway

(It is just called runway 3 as a shorthand, much as u txt ppl.)

Yes, these runways are parallel, but approaching and departing flight paths below an altitude of 3000 ft are not all parallel.

an aircraft flying overhead once every 90 seconds. I highly doubt that estimate

FYI, page 75 of the consultation document states:

3.92 … — on average around 140 seconds between arrivals, compared with an average of 86 seconds today

Your last point I have time to respond to now is:

Equating a new runway to somehow exporting money from a country is ludicrous.

No, quite the opposite. British holidaymakers spend more when they go abroad than tourists do in our country. Vacations aside, elderly British people even ‘migrate’ to warmer climes such as Spain for the winter, to save on British home energy bills! In September 2006, Friends of the Earth released a report, Pie in the sky – why the costs of airport expansion outweigh the benefits, which explains how economic arguments have been cherry-picked to support airport expansion:

3.1.2 UK tourism

The aviation industry and Government are keen to stress the economic benefits to UK tourism from increased foreign visitors. However, this is yet again a one-sided analysis. At the same time as foreign visitors coming here, a greater number of UK residents go abroad, and this will increase with airport expansion. The UK runs a massive economic deficit from air travel. Foreign visitors arriving by air spent nearly £11 billion in the UK in 2004, but UK residents flying out spent £26 billion abroad – a net loss to the UK economy of £15 billion pounds a year. If airports expand as planned, this net deficit will increase to £30 billion a year by 203076. The cumulative extra cost to the UK economy in the coming decades would be well over £100 billion77.

It is worth noticing that this is not just a balance of payments issue for the whole economy, but an acute issue for the UK tourism industry. UK tourism is far more reliant on domestic visitors (83% of spending) than foreign visitors – aviation expansion will put far greater strain on the domestic visitor component of UK tourism than it will benefit the foreign visitor component.

This is particularly an issue for the regions of England – London is the main region benefiting from foreign visitors – where spending in is roughly the same as spending out. But in regions such as Yorkshire and Humber, the ratio of money out to money in is over 6 to 1.

Increasing the net outflow will have an overall negative effect on tourism in the UK. According to Visit Britain78 2003 UK residents spent over £59 billion pounds on tourism in the UK, nearly 5 times the amount spent in the UK by overseas visitors. Domestic tourism accounts for 83% of the spending upon which 2.2 million jobs in UK tourism rely. If more people holiday abroad, this will reduce the amount they spend in the UK.

Details on tourism deficit79

The Government attempts to gloss over these figures by asserting that the numbers of foreigner visitors will increase faster than the numbers of UK residents leaving, and that the rate of spending increase per foreign visitor will increase faster than that of UK visitors abroad, and then expressing the hope that if this happens then the gap might close. However this is not borne out by the evidence – the gap is not closing, it increases every year.

There are two key assumptions to test – on inward and outward visitor numbers, and inward and outward spending per visitor.

i) Different rates of inward and outward visitor growth

It is more likely that outward visitor numbers will grow faster, as has been the trend of the last ten years. Since 1995 the number of visitors to the UK has been growing at an average annual rate of 1.8%, whereas the number of UK residents going abroad has been growing at 5.0% a year. This is the main reason why the UK travel deficit has grown from £3.6 billion in 1995 to £17.2 billion in 2004. It is very conservative to assume that both inward and outward visitor growth increase at the same rates: Office for National Statistics figures for 1984 to 2004 show that there has been a growth of 82% of UK overseas leisure trips by air, compared to an increase of only 38% of overseas residents’ trips to the UK by air80.

ii) Spending per visit

Spend per visit has consistently been growing in real terms and outward spend per visit has been growing faster than inward spend per visit.

Some DfT analysis has optimistically assumed that inward visitor spend will increase faster than outward visitor spend. Historically, inward tourists have spent more than outward tourists. But this gap has narrowed in recent years. Over the last six years inward spending has stagnated, and fell by £20 per visit between 2003 and 2004, whereas outward spending per visit has grown in each of the last six years, and increased by £8 per visit between 2003 and 2004. Currently national average spend is £541 for inward tourism, and £517 for outward. So again it seems conservative to assume that inward and outward spending levels will stay constant relative to each other.

The Government also states that not all the money spent by British people going abroad goes abroad – for example money spent at travel agents. But with no frills flights, little money is spent at high street agents, it’s mainly booked on-line direct with the airlines. In addition, the National Statistics Office figures are for spend abroad, not total holiday cost, so the deficit is real and not compensated for by agents fees.

Finally, if the UK is counting tax revenue benefits of airport expansion, it should count the tax revenue loss of this tourism deficit. With a current deficit of £17 billion, VAT loss is £2.5 billion.

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5 Comments »

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  1. I do wish I was there. I bet I could learn a lot! 🙂

    Regarding the ‘exporting money’ argument, my point was that even without a third runway the people of the UK would still travel abroad. An additional runway would simply make it easier and cheaper to do so; there would be more flights.

  2. Hello N.,

    Yes. I agree. Brits will always venture forth!
    .
    However, when facing a manmade threat that is recognised as the defining challenge of our generation, government and business campaigns to tempt us with cheap flights do not inspire hope that we will get to grips with climate change in time!
    .
    You are helping highlight this issue, and I thank you very much for that.
    .
    Anyway, I always like to see your avatar pop up now and again 😉

  3. Yeah! there should be a long term strategy to solve that!
    Can I know Actually where do most Brits like to go

  4. Hi Erick,

    I don’t have the figures off the top of my head. There are differences between people taking excruciatingly cheap short-haul flights to continental Europe—e.g. poor old Prague for stag nights and Spain for holidays—compared with long-haul weekend trips to New York for shopping.
    .
    They vary by season, currency rate, purpose (business or leisure, or combo) and fashion!
    .
    A reader can probably tell us where to look up stats for recent years …

  5. Thanks for Responce!
    But I would like to know what is the reasons(if any) behind the little spending of tourists in UK contrary to UK citizens spending abroad?
    Any reader can help us too.
    Regards
    erick


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