TOP CARIBBEAN TOURISM OFFICIALS are supporting calls for Great Britain’s air passenger duty (APD) to be scrapped after an economic impact study by audit firm PricewaterhouseCoopers (PwC) showed abolishing the tax would help the region’s tourism sector.
The study shows that getting rid of the APD could bring a lasting boost to Britain’s economy, generating a net tax gain for the Treasury and creating almost 60 000 new jobs by 2020.
It would also have an immediate positive impact on the Caribbean region with major beneficiaries being destinations that are heavily dependent on the British market.
President of the Caribbean Hotel & Tourism Association (CHTA), Richard Doumeng, and chairman of the Caribbean Tourism Organization’s (CTO) Council of Ministers and Commissioners of Tourism, Beverly Nicholson-Doty, welcomed the findings of the study, which was commissioned by EasyJet, Ryanair, Virgin Atlantic and British Airways’ parent company International Airlines Group.
They said in a joint statement that the tax was damaging to the region’s tourism economy and reiterated the Caribbean’s position that “at the very least the discriminatory aspect of the tax, which favours the continental United States, should be addressed by rebanding the Caribbean to the same level as the continental US”.
The APD is a departure tax based on the flight distance from Britain to the capital of the destination. It has four bands, with the Caribbean in a band that levies a higher tax than on United States travel. A family of four flying to the Caribbean in economy class, for example, now pays US$539 in the tax.
“CTO and CHTA would hope that UK’s Chancellor studies carefully the PWC report and recognizes that APD is damaging the UK travel and tourism industry and by extension the vulnerable economies of the Caribbean, the most tourism-dependent region in the world,” Doumeng and Nicholson-Doty said.
“Up to now, despite the weight of UK parliamentary support for the Caribbean and for the UK industry, the Chancellor has chosen to ignore the evidence that suggests the tax is counterproductive. Let us hope that this is the moment when he takes note of figures, independently produced, that indicate that APD is hugely damaging and its abolition could create growth.”
However, according to a report in Travel Weekly, the British Treasury has dismissed the findings of the PwC research, which found that abolishing the tax would mean gains in income tax and the Value Added Tax due to more business travel and tourism, and increase the number of business and leisure travellers to/from Britain as a result of lower fares.
“We do not recognize the figures in this report or agree with the assumptions behind it,” a spokesperson was quoted as saying.
Since the advent of the four-band system, Barbados, St Lucia, Antigua and Barbuda, Cuba and the Dominican Republic have recorded significant decreases in arrivals.
Recent analysis by the CTO shows that British arrivals to the Caribbean fell by ten per cent in the first quarter of 2012 in comparison with a three per cent drop in British holiday departures worldwide in the same period. (DP)