The boss of the UK’s biggest tour operator, Jet2, has spoken out about the deep-rooted need for a holiday – and urged the chancellor not to increase taxes on travellers.
Speaking exclusively to The Independent, chief executive Steve Heapy said: “The government must be careful not to kill the goose that lays the golden egg with excessive taxation.”
Chancellor Rachel Reeves is likely to increase a range of taxes as part of the autumn Budget, with air passenger duty (APD) widely expected to rise. Chancellors see APD as an attractive tax. Airlines do the collecting on HMRC’s behalf. Many of the people who pay it – overseas visitors – do not vote in the UK.
But Mr Heapy said: “I think successive governments have taken the travel industry for granted. We pay over half a billion pounds a year in tax.”
Jet2 comprises a low-cost airline, headquartered at Leeds Bradford airport, and a tour operator, Jet2 Holidays. The latter has eclipsed Tui, which previously had been clear market leader in the UK for decades.
“We’ve built the company – now 22 years old – on one principle: providing the best customer service,” said Mr Heapy. “It proves that people still want great service and great experiences.
“When we started, no one called package holidays ‘package holidays’ – they just called them holidays. People told us the term was old-fashioned, but we stuck with it, and now everyone calls them package holidays again.
“It’s a package of flights, accommodation, transfers, and – in our case – fantastic customer service.”
Under the Package Travel Regulations, holidaymakers enjoy much more consumer protection than if they construct their own “DIY” trip.
The Jet2 CEO said the appetite for holidays remains extremely strong despite economic uncertainty.
“Everyone wants a slice of sunshine,” he said. “The British summer is unpredictable. People want to be looked after, forget about daily life, and just relax.
"If I didn’t have a holiday, I’d probably go insane.”
During much of 2020 and 2021, holidays abroad were off the agenda because of Covid travel restrictions. Some travellers are still trying to extract refunds from companies for holidays that did not go ahead.
In contrast, says Mr Heapy: “Jet2 refunded money before people even asked. We do that because we segregate customers’ money. Many companies use customers’ cash to fund operations, so when Covid hit, they couldn’t refund.
“We don’t do that. We separate it, so when holidays couldn’t go ahead, we could refund immediately.
“Imagine buying a TV and the shop saying, ‘sorry, it’s not available – but you can’t have your money back’. That’s what some companies did with holidays. It was disgraceful,” he says.
Business bounced back swiftly once Covid restrictions were lifted, and Jet2 has expanded relentlessly. “So far, holidays have been resilient, more essential than many discretionary spends,” Mr Heapy said. “But costs are rising – inflation, taxes, sustainability fees – and ultimately, customers pay.”
A problem widely reported across the summer was protests against overtourism in Spain, which is by far the most visited overseas nation for British holidaymakers.
But the Jet2 chief executive believes mainstream package holidays are not responsible.
“I don’t call it ‘over-tourism’ – I call it ‘poor tourism management’,” he said. “Licensed tourism – hotels with proper facilities and taxes – is manageable. Properly managed, licensed tourism benefits everyone. Unlicensed short-term rentals, however, disrupt local communities and often evade taxes.”
His solution: government officials making “mystery shopper” visits to Airbnb rentals.
“Find out who owns the property. Go and knock on the door. Then say, ‘Hello, I'm from the government. I've just booked your property on Airbnb. Can I see your tourism licence, your health and safety certificate and your tax returns? Oh, and you're supposed to collect a tourism tax as well, that's levied on people that stay in hotels. It's only fair that you pay it as well, so show me all your invoices for that?’”
Even without protests from local residents, the potential threats to a smooth operation are endless, but Mr Heapy singled out European air traffic control as posing problems for a company that is focused on the Mediterranean.
“Air traffic control is struggling with capacity and staff shortages, especially in Europe. There’s frequent French industrial action.”
Intense competition is another constant. While easyJet is eight years older than Jet2, and a bigger airline by some distance, its holidays operation is less than half the size of Jet2.
But speaking on easyJet’s 30th birthday, chief executive Kenton Jarvis said easyJet Holidays would continue to grow: “I think even internally we've been a little bit surprised about the speed and success of easyJet Holidays. It does offer incredible prices.”
Now 56, Steve Heapy shows no sign of slowing down in the race for the hearts and wallets of British holidaymakers.
“When you do something you love, it’s not a toil of labour. I love it.”
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