Tourist trap?

0:00This BBC podcast is supported by ads outside the UK.

0:30up at Whole Foods Market.

1:00to buy, sell or attain any specific investment or service.

1:05Wake Up To Money from BBC 5 Live. Hello, welcome to Wake Up To Money. Plans to give mayors in England the power to introduce a levy on tourists expected to be outlined today. What could be the impact on your region if you haven't got that already? The fallout continues from the havoc caused to UK airspace, with the government now calling on the aviation regulator to investigate how this technical error occurred. What should be happening compensation-wide for passengers, for airlines? We're going to speak to one former airline boss who'll tell us how it's being received. This is the moment when Apple revealed its new foldable product.

1:46So after all the hype, this is iPhone Duo. Are investors impressed by it? Will customers come out and buy it? Two grand the price tag. That's just the starting point. We're going to get into that as well. Wake Up To Money with Sean Farrington. Good morning. It is Wake Up To Money on BBC Five Live. Thursday morning, the 10th of September, just after five o 'clock. If you're in the hospitality industry, in England in particular, and see that there are plans to introduce a levy on tourists that are going to be expected to be outlined today, let us know your thoughts on that. If you're in the hospitality industry, Scotland, Wales, where you've seen some of this in place before already to varying degrees.

2:30How has it played out? Has it made a difference? Has the money raised made a difference? Let me know your thoughts on that. I've got Rachel Winter with me this morning, partner and investment manager at Killick & Co. Rachel, very good morning to you. Morning, Sean. So here we go. It's dubbed the tourist tax because it's going to be a levy on people staying overnight in accommodation around, well, England is what this is all about today. It was first raised by Sir Keir Starmer's government in November. It's going to be similar to this scheme that runs in Scotland, so a levy that's going to be charged as a percentage of the cost of accommodation, so not necessarily a flat fee.

3:10And the government says this will protect budget holidays. In theory, no limit to how high the regional powers that be the regional mayors can put it. What do you think to these developments? I don't think it's surprising. I think it's very common in many parts of the world to have a tourist tax. I mean, I was in France last week and I had to pay a nightly rate as a tourist tax. I think it does spread out the cost of a holiday to some extent, because when you book, you obviously pay for the hotel up front. And generally, it's not until you check out that you have that additional tourist tax. So I think it will be a bit of a nasty shock to some people.

3:46And, you know, the hospitality industry, the front of the Daily Telegraph today, Labour's new tax assault on hospitality. Burnham gives mayors power for unlimited levy on stays in blofer pubs and tourists. Do you see it as a blow for hospitality? It depends how the money is spent. So if the money that's raised goes towards helping the industry, then potentially it could be a good thing. But if the extra cost is seen as very high to tourists and therefore it becomes a deterrent to people in terms of travelling, then it would be a negative. Got Wayne Chapman with us on the show today as well to chat about everything that comes our way.

4:22He's the UK Managing Director and Chief Executive of the global logistics company, Stassi. Wayne, good to have you on the show. Morning to you. Yeah, good morning, Sean. What do you make of this one? Well, I think, yeah, just to echo what Rachel says, I think it depends on the impact of it, on the scale of it. I think for me, there will be a tipping point depending on the scale of it. And I think as long as there's a consistent approach applied and people know the scale of it, I think if you go into Europe, it does differ depending on which country you're going to. So it's not new. And I think as long as there's a consistent approach and it's not too expensive, I can't really see it impacting too much.

5:07Well, it's interesting you say consistent approach because this is power that's being given to mayors around England to decide what to do with it. And, you know, if you look at the Telegraph piece on the front of the Telegraph, you know, they've got comments from Lord Houchin, who's the Tees Valley mayor, who says the overnight visitor levy is just a backdoor created by Labour to tax businesses even more than they do already. This will add cost to do business, cost jobs and make it more expensive for families to holiday in the UK. Now, it doesn't detail exactly what he and his region would decide to do with this, but somebody who's not sort of impressed with the idea.

5:43And yet, obviously, we've got the former mayor of Greater Manchester, Andy Burnham, who's now prime minister, pushing this. So you would imagine that the Greater Manchester region might see more embracing of these kind of things. It might not have that consistency around the country. Yeah, and I think that is a concern, because if you're an overseas tourist looking to come to the UK, if you don't know what your costs are going to be, because you don't know what the costs are per region, then that needs to be really, really clear. And I think that would be a concern for me, definitely. 85058, very much like your thoughts on this.

6:22So actually, when Andy Burnham was mayor of Greater Manchester, when the city introduced its city visitor charge in April 2023. That was a£1 a room per night fee. That was to pay for measures aimed at attracting more visitors. Regional Mayor saying that the levy is needed to raise more income to invest in local priorities, support economic growth. You know, Rachel laying out there about, it very much can depend on how much of that plays out in your local region. The trade body for the hospitality industry has already warned this year that a tax like this would raise the cost of holidays. It said additional charges risk undermining international competitiveness as well.

7:00So as we've been hearing, many pay this on their travels around the world already, but it could discourage domestic breaks, particularly for families and young people, the hospitality industry say. So, yeah, Rachel's seen them in France. Where have you seen them, Wayne? Yeah, again, similar to Rachel, all over Europe. If you go certainly France, Belgium, Italy, then depending on where you are, you will see. It's normally a modest charge, kind of like a couple of euros a night. It doesn't really add up until you're there for multiple stays. But certainly if you're a family with a couple of rooms, say, in a hotel over a week, then yeah, that is going to be noticeable.

7:4785058, let us know your thoughts on that one. Let us cross to California, I think, is where North America technology correspondent, Lily Jamali, is joining us from, who was at the launch of the iPhone Duo, Lily. Lily, good morning, our time at least. Before we crack on to this, you will have heard this already. Let's just hear a little bit of the clip that helped introduce the phone at the launch. Sure. iphone duo is unlike any iphone you've experienced before it's entirely new and at the same time remarkably familiar unlike anyone you've seen before but it's remarkably familiar lily what tell us exactly what this one was all about i can't explain that it is way too late here for me to try to parse that but i what i can tell you after i'm still on the apple campus actually here in Cupertino, California, is that Apple is trying to frame this new phone in a very particular way.

8:48It is revolutionary. It's going to change how consumers experience foldable phones. And a lot of that is coming from the top. The new CEO, John Ternus, who took center stage for the first time as CEO today, unveiled the duo. So he, you know, made clear that this is a new form factor that that he has a lot of confidence in. Of course, he was the hardware chief before he took the reins. So he has spent a lot of years of his life working on this phone. And what do you reckon then, Lily? What was the chats around it as people got to see a proper glimpse of it and get a bit of an idea of of what might actually be different to all the foldable phones that are out there already?

9:35Yeah, I mean, I think that I'll caveat this by saying, you know, the folks you find here on the Apple campus are generally pretty positive on Apple. But I do think, you know, going into this event, we were hearing a lot about some of the bigger problems that often come with a foldable phone. Things like battery life not being as good. The camera is not always as good. They can be extremely expensive. And this phone is expensive. It's going to start at$2 ,000 American, 2 ,000 pounds for UK consumers. And it goes quite a bit higher than that, well over$3 ,000 if you add on, you know, storage. But, I mean, it's actually lower than I think what a lot of people were expecting it could be.

10:24The price? Yeah, the price. Blimey. What were people thinking? So we thought it's going to be just, I think, you know, people were saying, you know, So$3 ,000 might be what we're looking at. And that is true if you are looking to purchase that extra storage. But the baseline price being$2 ,000, I think, you know, that's only, I don't know,$100 more than the comparable Samsung phone that's out there. The issue is foldables have not gained a ton of traction by and large in the smartphone market. It's still 2 % of the market as of last year. So, you know, this would be an opportunity for Apple to show up with this new, its version of this fairly new to many form factor, as they call it around here, and say, now people are going to be interested because Apple is now in the game and we know how to get people to shell out a lot of money for something like this.

11:18And even Apple, it seems, aren't going to sell that many of them relative to the number of iPhones they sell every year. We'll see. I mean, the iPhone is hard to beat. I think there are 3 billion of them that have been sold over the last 20 years. So we're now coming up on the 20th anniversary next year. And that was a revolutionary product. Good to recall. I just happened to watch the BlackBerry movie, so this is top of mind for me, that Apple was late to the smartphone. And then look what happened. You know, it didn't happen overnight, but certainly they have become the dominant player there.

11:53This is the biggest change to that flagship product in these last 19 years. And so, you know, there's a lot of Apple fanboys and fangirls out there who are going to spend that kind of money on this. I did get to play with it earlier, by the way. Oh, you did? Right. Yeah. And we were at Apple headquarters and I got to touch it, open it up, play with it. And it is really cool in the sense that, you know, it is smaller. You know, we carry this massive brick around in our pockets, but it's smaller before you open it up. It's the size of a passport. It's ever so slightly heavier than my iPhone is now.

12:30I have a pretty standard size phone. And when you open it up, you get this 7.6-inch screen. You can watch movies and television on it. You can read books. You can also kind of use it almost like it's got these, you know, two sides to it. So you could be doing something on one side, doing an entirely different task on the other. And you can do a lot of that stuff on other foldables that are already out there, can't you? You can, yeah. And I mean, I think there's so many out there to choose from. I mentioned Samsung, Huawei and Xiaomi also are in the game. Motorola, there's a lot of options out there.

13:09But while the foldable segment is growing, especially in places like China, it just has not blown up the way that some other technologies, including the standard smartphone, non-foldable smartphone have. People over the decades now will have been used to the image of Steve Jobs and more recently Tim Cook standing up on stage, trying to tell us what the next great thing that Apple are going to produce is going to be. This time it was John Ternus, the new chief executive. How was all that? Was there a different feel to what Apple's all about? Well, let me just say, first of all, you know, this was a hour and 20 minute long video.

14:00So this is a departure from back in the day when Steve Jobs would get up in front of everybody and do these live demos and crack jokes. And it was much more interactive back in back during the Steve Jobs era. Now you get these very carefully curated videos. And I would say, by and large, the transition has been extremely well coordinated and choreographed from Tim Cook to John Ternus. So in the video that we all sat there and watched together, there's a moment where you hear Tim Cook's voice and he goes, oh, no, no, no, it's not me. And you see John Ternus in the background. And then it goes to John Ternus actually introducing a bunch of other things, updates to the Apple Watch and AirPods and so many other things, the iPhone 18 Pro.

14:48But the one more thing phrase, which is made famous by Steve Jobs, John Ternus actually used that before tossing to this video about the foldable iPhone duo. So, you know, that was quite a nice throwback to the Steve Jobs era. I think Columbo got there before Steve Jobs did that one more thing. But we'll allow Steve Jobs that one. Lily, always great to talk to you. I mean, fascinating to hear about, you know, what is going on there, what it's like at the heart of Apple HQ. It must be hard to find a bit of a balanced view from people chatting about there, but it'll be interesting to see how all of that plays out.

15:28Lily Jamali, our North America technology correspondent who got a bit of a glimpse at that iPhone duo. Rachel, the calmness, the brutal calmness of investors who won't care about the jazzy words that are coming from the mouths of those who work at Apple. but will be intrigued into how sales are going to be of this product and others. Are they keen on Apple at the moment? Well, they're keen on the company as a whole, but I don't think that's really because of this phone. I think it's because they're quite reassured by the fact that Apple isn't spending as much as other companies on AI. So to put that into context, Apple is expected to spend about$14 billion this year.

16:10If we compare that to Alphabet, Alphabet is spending about$200 billion. And that's made some investors a bit nervous. So we've seen more people buying Apple shares because they feel a bit more comfortable with the spending. But if we look at yesterday's share price reaction to this new phone, shares were down about half percent yesterday. So not a particularly big move. And they're expected to be up about 0.9 percent when the U.S. market opens this afternoon. So not a significant move there. No, and it does sound just the way Lily was describing that launch there with the CEO not actually on stage.

16:44And maybe the take up of foldable phones hasn't been what many thought it might have been over recent years anyway, that this may not be the big first move of the new chief executive of Apple. But we will see, I guess. Let's have a look at developments in the oil price as well. For the first time since July, we're waking up this morning with the oil price over$100 a barrel. And interestingly, Donald Trump, you know, we often wake up to comments from Donald Trump on one thing or another. He's been talking in a bit more detail about when he thinks the war in Iran might end. I think the war will end immediately after the election because they can't hold out any longer.

17:29They're desperate to try and affect the election. All they want is a nuclear weapon. And if they had a nuclear weapon, the whole world is in deep trouble. Mr President, you've been saying for weeks that oil and gas prices are going to come down. Oil is now back above$100 a barrel. How do you explain this to Americans who are wondering when prices are going to come down? Well, I think it's very easy to explain to America. All you have to do is say, will you let Iran have a nuclear weapon? And the answer is no. Wayne, you're the boss of a global logistics company. What impact is this prolonged era of very high energy costs having?

18:07I think my one answer to that is simply it drives consumer inflation because most products on the shelves have an element of logistics and warehousing in them, and fuel price simply drives the prices that consumers will pay for their products. People are feeling it already. People are commenting. I've had two people yesterday commented on the price of fuel at the forecourts and the fact that it's costing them£25 more than it was six months ago to fill up their car. and that eventually does filter through to the price of products on shelves in the UK. Most contracts are kind of like inflationary linked or they have some element of fuel escalator in them and therefore it's a real concern for everybody in the logistics and warehousing sector and therefore it should be a concern for consumers.

19:14How does this feel compared to the oil price spikes we saw when Russia escalated its invasion into Ukraine in 2022? Because we had the price impacts on the back of that. Does it feel similar? Is it different? I think it definitely feels different because it's not as spiky. But what has happened, it's just been at a high level for a period of time now. However, there has been an increase over the last few weeks. And it's now a case of when is that going to last? and I think that people have almost become immune to what Donald Trump says because the memorandum of understanding was signed three months ago and the fuel price came down but it didn't come down significantly because I think people are thinking, is this really going to hold out?

20:18So really it's just a case now of seeing what's going to happen and when But I think everything that I'm hearing from an analyst's point of view is that inflation will continue to increase, if anything, just due to the lag effect. The lag effect of? The lag effect of the fuel price and the impact that it will have on product going forward. Right. So even if the oil price did come down and fuel prices came down in the short term, it still takes a bit of time, does it? When you've had oil prices this high for so long, it takes a bit of time for that to really get into the supply chains, get into the cost of making stuff and onto supermarket shelves.

21:09Yeah, that's correct, because from a commercial perspective, then you don't tend to have an immediate increase like you see on the forecourse. It tends to be a two or three month lag. And also, we've got to remember as well, it's not only on fuel prices, it's also on fertilizer costs and other utilities as well. And I think that we've yet to see the full impact of that. Has there been much impact? I don't know how much the cargo world will impact what you're doing at Stasi, Wayne, when you have the air traffic control issues that we've had in recent days. And, well, we had the issues and then the consequences of getting back on track after the issues have been resolved.

21:57Has there been any knock on effect for the logistics industry there? Not really. The air freight tends to be moving things around by planes. It tends to be a small proportion of the market. It tends to be the sea freight, which has a bigger impact just due to the scale of it. So the air freight tends to be urgent products that are required that clearly cost a significant amount to transfer by plane. So I think it's such a blip at the minute that there'll be no real impact from an air freight point of view. Whereas that is one reason why so much of the headlines have been about individuals' consequences because of these problems, these technical problems at air traffic control earlier in the week.

22:52Hundreds of thousands of people thought to have been affected by flight cancellations and delays, likely to be refused compensation. The Transport Secretary, Heidi Alexander, apologised wholeheartedly, she said, and says she's asked the Civil Aviation Authority, the regulator, to conduct an independent review. Last night, that regulator said that under passenger rights rules, the disruption cause is likely to be considered the result of extraordinary circumstances. Here's Matt Ernster, who was returning to America via London after a Paris honeymoon. He says he sat on a plane for more than five hours before getting off again and spending the night in the terminal.

23:30It felt like an apocalyptic situation. It was the worst travel experience I've ever had. We finally, after a few hours, we found our bags. We got out of customs out of the airport and then we said, hey, let's find a hotel. Every single hotel within two hours of the greater London area was booked. Well, at least you've got a story for your honeymoon, Matt. The UK's air traffic control provider, Nats, says operations are now stable, saying it's going to invest a technical glitch in the system. We've got Dave Bryan with us, who's former manager, former managing director. Let's get this right, shall we?

24:04Dave Bryan, former managing director of BMI Baby. Remember that? A low-cost airline that grew to become one of Europe's largest and was sold to IAG Group and British Airways back in 2012. Dave, good morning to you. Good morning, Sean. How are you? I'm okay, thank you. I'm in a bit of a calmer situation than many who've been travelling through airports impacted by all this in the UK in recent days. What do you make just first of those comments from Heidi Alexander and the regulator, actually, under passenger rights rules? This is considered to be the result of extraordinary circumstances. It's the third time in three years, isn't it?

24:42It's extraordinary circumstances. Yeah, the third time in three years is extraordinary circumstances in terms of the legal rights of passengers to claim back from airlines. Airlines are on the front line of this. They took the brunt of the issues from the consumers when this happened the other day and knock on yesterday. And rightly so. That's who they've bought their ticket with. That's who they're expected to deliver on the service of providing a flight from point A to point B. And that didn't happen. Now, the issue that airlines have, it was completely beyond their control. At the moment, airlines have a duty of care to look after the passengers until they complete that journey or cancel that journey.

25:22The sticky issue of whether there is compensation for things that the passenger then has to pay for themselves beyond the scope of the flight itself. and the tag of extraordinary circumstances basically frees the airlines from playing compensation to the passengers because it was completely beyond their control, their direct control. Would you expect people with travel insurance to be able to get a little bit more out of this if they've got the right policies? Yeah well the key is the last line there Sean, have they got the right policies? Yes, obviously you know I don't work in the insurance industry but they do cover situations like this.

26:03Whether the specific policy will exclude it for extraordinary circumstances is open to debate. And, you know, they're going to do everything they can, insurance companies, I think, to try and use that as it has in the past. It's incredibly frustrating for consumers who've had to outlay additional monies. And as your previous caller said, you know, when there are no hotels available, and this happened across Europe, because not only was it the UK that was affected. It was passengers that were at the B end, in other words, that were expecting the return flight back, if you like. You know, some in quite remote places who couldn't find accommodation and the ground staff couldn't find it for them in those places as well.

26:45So it's just a huge knock-on effect. The airlines take the brunt of the issue and have to pay for this. And they have no recourse to claim any of this back from that, even though they had no And the two issues we've got here are firstly, why has this happened again? You know, the resilience and the backup of Nats has got to be brought into question. But equally as important, why do the airlines have to pay for this disruption when it's completely out of their control? Can you explain a little bit more how Nats works? You read quite a lot and hear that it's a public-private partnership and the government has almost 50 % of it.

27:28and a lot of the rest is made up by some airlines having stakes in it as well. How does it actually work? Who's in charge here? That's a very good question. I think it's a question that will be asked by the CAA, who have been appointed by Heidi Alexander to undertake this independent review of not only what happened, But I think the airline industry are asking to widen the remit and say, you know, who makes the decisions here? Who's in control of this? Who's in control of the purse strings and the IT systems? You know, this shouldn't happen. This should not happen every single year. You know, the third time in three years that we've had major disruption that's cost millions of pounds to the airlines and disrupted, you know, 2000 flights, hundreds of thousands of passengers.