The impact of yesterday’s Budget will ‘take some time to assess’, ABTA has said, while others say increased taxes mean households will have less to spend on purchases such as holidays.
Key announcements by the Chancellor include the freezing of thresholds at which people pay income tax until the end of the 2030-31 financial year, lower rates for retail properties and free apprenticeships funding for under-25s for small and medium sized enterprises (SMEs).
APD, which is already set to rise on 1 April 2026, will increase in line with the Retail Prices Index the following year – a move that British Airline Pilots Association (BALPA) said would ‘hit families going on holiday the hardest’.
ABTA Chief Executive Mark Tanzer said yesterday: “Against a difficult economic and fiscal backdrop, it will take some time to assess the impact of today’s Budget. But what is clear, is that the success of the travel industry has never been more critical to the overall health of the UK economy.
“As such, the move to support high street businesses, including travel agencies, through a permanently lower level of business rates, is very welcome. However, ABTA remains concerned about the cumulative impact of taxes and levies on travel businesses and consumers.
“The introduction of a wide range of new taxes and tax increases, largely targeted at middle- and higher-income earners, is something that will need to be monitored carefully. With travel powering the UK economy over recent years, any negative impact on consumer demand for holidays would directly contradict the Chancellor’s own growth agenda.
“Similarly, changes to employment and business taxes, including further increases in the National Living Wage, especially for younger workers, will increase the cost of employment. The Government must be careful not to deter businesses from hiring staff, especially those younger people who are looking to start their careers in travel. However, there were also some positive moves in this area, including enhanced access to apprenticeships for SMEs.”
UK Outbound Travel Group spokesperson Julia Lo Bue-Said said: “The UK Outbound Travel Sector has performed well in recent years and has considerable potential to drive economic growth across the country.
“Whilst it is undoubtedly a relief not to see any significant changes to the taxes on our sector specifically, this Budget follows a series of measures that are squeezing the small and medium sized businesses that make up the bulk of the outbound travel sector. This will hold back growth in our sector and limit our ability to drive the growth we all want to see.
“The cumulative impact of increased National Insurance contributions, set to increase even further due to the Chancellor freezing thresholds today, and mounting tax burdens, means that independent travel business are struggling to invest, create and protect jobs, and grow.
“A number of the Budget announcements today are likely to leave households facing more financial constraints, prompting them to delay major purchases and reduce discretionary spending. We are concerned that this may reduce consumer confidence, prompting a slowdown in our sector and undermine economic growth at a time when we need consumer activity to drive the economy.
“The outbound travel industry supports thousands of jobs across the country, generates significant economic activity and has shown remarkable resilience. Our sector can play a bigger role in the Government’s growth agenda, and we are primed to contribute even more to the UK economy.”
However, Not Just Travel co-founder Steve Witt said he thinks agents can expect ‘an influx of bookings’.
Steve said: “Today’s budget has been one of the most anticipated in modern history. As a result, many consumers have been putting off buying decisions until after the budget. They wanted to know what disposable income they would have.
“The Budget shows there is no big immediate impact on consumers’ income. Consumer confidence will increase as they realise there are no big immediate changes. As a result, we can expect an influx of bookings for both last-minute and 2026 and beyond.”
But SPAA Vice President Alan Glen warned: “The increasing burden of National Insurance and taxation is now a direct barrier to employment. Every time the cost of employing someone rises, it becomes harder for travel businesses to take on new staff, to invest in apprenticeships or to grow. It’s sucking profit out of the sector — and then taxing what’s left.”
APD, which is already set to rise on 1 April 2026, will increase in line with the Retail Prices Index the following year.
The British Airline Pilots Association (BALPA) said the Budget was ‘bad news for the economy’, adding the rise in APD will ‘hit families going on holiday the hardest’.
BALPA Director for Strategy and Reform Alice Sorby said: “Firstly, the Chancellor has ignored calls from BALPA and the industry and announced plans to increase Air Passenger Duty in line with RPI from April 2027. Bad news for passengers, especially families going on holiday, who now face increased ticket prices.
“But it’s even more bad news for young people considering a career as a pilot. Rachel Reeves has missed an opportunity to deliver any measures that will make their eye-watering training costs more affordable.”
“If the Government wants to drive economic growth through expanding Heathrow, it needs to ensure we have the right skills to fill the new jobs the airport will create. The new runway will deliver 276,000 new flights to the UK every year. We want to see UK-trained pilots in the cockpits of those flights, and Rachel Reeves needs to make pilot training more affordable to achieve this.”
