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Tourism High on EU Agenda

European tour operators have given a broad welcome to the inclusion of tourism as a new item in the proposed EU Constitution. A clause on tourism has emerged in the latest draft of the Constitution for discussion among ministers and stakeholders in the member states of the European Union.

Until now, tourism has not featured as a main topic – or competence – in the affairs of the European Commission in Brussels, although it is a major element of enterprise in all states. EU regulations have a powerful effect on tourism policy, however, in the areas of transport, trade, competition, consumer rights and international law.

The European Tour Operators Association (ETOA) has given a broad but qualified welcome to the development. Tom Jenkins, Executive Director of ETOA says that he looks forward to seeing how this will turn into practical policies for the support of European tourism. “That tourism is now on the agenda of the EU is of great interest to the industry,” he said. “It is to be welcomed that the EU sees tourism in terms of enterprise and competitiveness. It is also extremely encouraging that they implicitly understand that Europe’s greatest asset as a destination is its diversity,” said Mr. Jenkins.

The new article of the EU Constitution says that the EU aims to encourage the creation of a favorable environment for the development of tourism businesses, and promote cooperation among member states – particularly by the exchange of good practice.

“A European law or framework law shall establish specific measures to compliment actions within the Member States to achieve the objectives referred to in this Article, excluding any harmonization of the laws and regulations of the Member States,” says the text of the new Article.

The ETOA has a number of concerns, however, concerning the lack of a working definition of tourism at European Union level, and would like to see a distinct set of proposals for Europe-wide action as opposed to national activities. There is so far no indication of whether tourism will become a prime responsibility of a European Commissioner, as in the case of agriculture or transport and energy.

Decisions by several commissioners can have an impact on tourism policy but they tend to be uncoordinated and related to industry in general rather than the specific needs of travel and tourism.

The ETOA says it will be pressing for tourism to be higher on the EU’s agenda from now on. It wants to see a relaxation in the operation of value added tax on trade in the tourism sector, and says: “Since the activity of bringing tourists to Europe is exporting (it earns foreign currency), there is a clear logic in exempting it from VAT, as is the case with other exports. Reforming the application of VAT to tourism exports would make Europe more competitive as a destination and would assist in the creation of jobs within the EU.”

Another area of concern is the requirement for tour operators to place substantial amounts of money in bonds. Tour operators are required by European law to provide a bond that can be used to repatriate clients in the event that the operator collapses financially. The problem is that the bond system operates on a nation-by-nation basis and a bond in one country is only good to get clients home to the same country.

The ETOA says this arrangement has the effect of limiting competition and inhibits free trade. “The EU’s inability to establish a truly borderless destination is greatly to be regretted. Reform of the Package Travel Directive and, within it, the operation of bonding must now be a top priority for EU officials dealing with tourism,” said ETOA Director Tom Jenkins.

The ETOA also questions the exclusion in the tourism Article of any determination to harmonize national laws relating to tourism. In some parts of Europe, there are local laws that prohibit tour guiding without the services of a locally qualified and licensed guide. There are no specific proposals so far to create Europe-wide mutual recognition of tour guide qualifications, even though the national restrictions conflict with European law on the free movement of workers within the EU.

“One of the central objectives of the EU is to create a more open, fair and competitive market,” said Tom Jenkins. “It is therefore particularly distressing to see that EU institutions are apparently impotent to deal with overly restrictive national practices in tourism. Resolution of this issue must be a key test of success.”

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