/ Interview with Mr. Alain Dupeyras, Head of Tourism at the OECD

The OECD Tourism Committee helps member and partner countries develop policies that address major challenges faced by the industry (e.g. competitiveness, quality jobs and skills, innovation, sharing economy, travel facilitation, taxation), promotes an integrated governmental approach to tourism (effective policies for tourism growth), contributes to improved measurement and analysis of tourism services (e.g. Tourism Satellite Account, competitiveness indicators, impacts of tourism at regional level), and enhances international co-operation in tourism. HOTREC asked Mr. Dupeyras to share his views about some of the challenges that the tourism industry is currently facing at global level. 1) According to the 2014 Report on Tourism Trends and Policies 2014, OECD countries still account for over half of international tourism arrivals (57%) and spending (54%) but are losing market share, notably to the Asia-Pacific region. In addition to facilitating visa and entry formalities in order to attract more tourists from emerging economies (such as China) what other measures could be put in place by OECD countries to attract more tourists and, thus, stop losing market share? Tourism is a large and fast growing sector in the world economy and a valuable source of job creation, economic growth, export revenue, and domestic value added. While OECD countries have been losing market shares over the past decades, OECD Tourism Trends and Policies 2016 highlights that in 2014 the global tourism growth was in fact largely driven by a resurgence in arrivals to OECD countries. Despite this, up to 2030, international tourist arrivals to emerging economies are projected to grow at double the rate of that in advanced economies. This is why the OECD is actively working with governments to design and implement integrated (whole-of-government) policy responses that will help to ensure that tourism remains a competitive sector and continues to grow sustainably in the years to come. In particular, we are advocating a stronger policy coherence, a longer-term approach, and robust public-private partnerships. Through our policy forum, we permanently share good policy practices in areas such as effective governance mechanisms, digitalisation of tourism and new business models, better connectivity and multimodal transport experiences for tourists, innovative mechanisms for financing tourism SMEs, green innovation in tourism, and service quality and skills developments, just to name a few. 2) Most countries in the EU apply since years reduced VAT rates on many tourism related activities, including also accommodation and restaurant services.  Did the OECD assess/measure any positive impact of applying a low level of VAT and taxation in general on tourism related services? The work of the OECD Tourism Committee (Taxation and Tourism) sought to contribute to the emerging policy debate on taxation and tourism, by examining the rationale and concerns from both a government and industry perspective, and by providing comparative information in the form of an inventory of tourism-related taxes, fees, and charges. The inventory analysed taxes related to arrival and departure; air travel; hotel and accommodation; reduced rates of consumption tax; environment; and incentives. At the time of the study, reduced rates of consumption tax for tourism-related activities focused primarily on hotels and restaurants. From a government perspective, the rationale for reduced rates for many countries was to support overall development, job creation and growth in the tourism industry. From an industry perspective, there was the view that the lack of a reduced rate, or the existence of a higher reduced rate relative to competitor destinations, could negatively impact upon the competitiveness of destinations. Our work underlined the lack of robust monitoring, evaluation and analysis of the impacts of existing taxes and incentives on tourism. This combined with a more collaborative approach with industry towards tourism taxation could also assist governments in defining the optimal taxation system for tourism. 3) The so-called "sharing” economy has risen over the last years, posing challenges to both markets and regulators. How does the OECD envisage the development of the "sharing” economy and which could be the way forward vis-à-vis the regulated accommodation sector?  The rapid growth of peer-to-peer and shared usage platforms is giving people new options for where to stay, what to do and how to get around. These platforms have adopted differing business models - some closely mimic traditional commercial activities, while others appeal to users' sense of community. The OECD is working with governments to find a way to harness the opportunity to stimulate innovation and support the expansion and development of tourism as a whole. At the same time, these developments raise new policy questions regarding the nature of the competitive environment and implications for existing providers; the extent to which consumer protection and regulatory frameworks are fit for purpose; and the taxation of sharing economy activities. We believe the growth of the sharing economy may present an opportunity to reassess the overall regulatory framework for the tourism sector, for example, to ensure it best responds to the current realities in the sector and optimises opportunities for the future. The OECD’s work seeks to outline a path forward for policy makers on these issues.