As consumers fly off on their Summer holidays, and international tourists return to the UK in droves, the return to some form of normality is a welcome step, and a reminder of just how important travel is to our lives and livelihoods—whether it’s for work, leisure, or seeing loved ones.
In a normal year, a greater proportion of Britons travel abroad than almost any other nationality, showing our openness to the world. The travel industry generates £8.5 billion for the economy, supports almost one million jobs, and is recruiting rapidly to meet demand—whether that’s across airlines, hotels, airports, or airport retailers.
Within this ecosystem, travel retail is key to the financial viability of airports in every region of the UK, and airports in turn are a critical motor for growth across the UK. Shopping revenue represents up to 40 per cent of the income for many airports, helping to pay for infrastructure, and keeping ticket prices lower—as well as creating flexible jobs.
One of the welcome reforms introduced by the Johnson administration was the return of Duty Free shopping when flying to the EU. This will benefit 72 million passengers annually. In January 2021, the Government also quadrupled in-bound Duty Free allowances—meaning passengers travelling to the UK can buy up to four litres of spirits Duty Free. This is one of the most generous allowances in the world, and a testament to the British Government’s efforts to take advantage of newly independent trade policy at a time of rising international tensions.
With a Conservative leadership contest underway, however, we would say to the next Prime Minister that this boon for travellers is not—as it stands—the boon for UK plc that it should be. The reforms mean someone flying from Paris, Dubai or New York can buy four litres of spirits Duty Free on departure and bring it back to the UK, but they cannot currently use this on arrival. This places UK airports at a significant commercial disadvantage; the UK’s generous Duty Free allowance can only be used on international soil and foreign airports are benefitting at the expense of those in the UK.
Thankfully, there is an easy way for the next Government to address this issue; one which would be good for the UK economy, on shoring the economic benefits here, and one which would prove popular with consumers. By amending the rules to allow UK Arrivals Stores, travellers could purchase four litres of Scotch whisky or English gin on landing in the UK.
Polling released by the UK Travel Retail Forum this week shows 55% of British people want to see Duty Free Arrivals Stores in the UK—so they can shop and save on entry. Indeed, contrary to some common misperceptions, the impact on high streets would be minimal; only 6 per cent say they would buy less alcohol from retailers in Britain. If anything, Arrivals Stores in the UK would capture sales currently taking place abroad.
Duty Free Arrivals Stores are commonplace worldwide; more than 65 countries already have them in place, including many of our closest trading partners—for instance the Nordic countries, Australia, and New Zealand. Our experience suggests Arrivals Stores could boost UK airport passenger spending by 20 to 30 per cent, creating jobs, supporting airport infrastructure, and facilitating ease of travel.
York Aviation estimate that for every one million passenger journeys, Arrivals Stores would generate 155 jobs, £14 million in Gross Value Added, and over £5 million in tax revenue (through Corporation Tax, for instance). At a time when the next Prime Minister will—rightly—be focussed on using the UK’s post-Brexit regulatory freedoms and restoring economic growth for generations to come, we would urge them to consider this as a quick-win policy.
