News Americas, NEW YORK, NY, Fri. March 16, 2012: The Caribbean continues to suffer the negative impact of Air Passenger Duty on arrivals from the UK and fears that the situation will be made worse by the increase scheduled for April 2012.
That’s according to Richard “Ricky” Skerritt, Chairman of the Caribbean Tourism Organization and Minister of Tourism for St Kitts and Nevis.
“For as long as the UK retains the current four band APD system which sees UK passengers to the Caribbean charged more in duty than those traveling much greater distances to US destinations,, the Caribbean is placed at an unjustifiable competitive disadvantage,” said Skerritt. “The UK government’s response to its consultation on reform of APD was a slap in the face for the Caribbean. This issue is so central to the economic development of the Caribbean and to its 800,000 strong community in the UK that we will continue to argue that we must be included in the same band as the US.”
His comments come as the Caribbean Hotel and Tourism Association, (CHTA), and the Caribbean Tourism Organization, (CTO), have welcomed recently published research by the World Travel and Tourism Council (WTTC) confirming the significant value of travel and tourism to jobs and growth and the damaging effect of Air Passenger Duty to the industry with both noting that this is something that has long been recognized in the Caribbean, the most tourism dependent region in the world.
Commenting in reference to the research conducted by Oxford Economics for the WTTC relating to the sensitivity of passengers to changes in air fares, Josef Forstmayr, President of the Caribbean Hotel and Tourism Association, said: “The study reflects the huge economic contribution that travel and tourism makes. A significant proportion of visitors to the Caribbean originate in the UK. Those visitors are vital to both the Caribbean economy and to UK airlines, tour operators, travel agents and all of the companies providing back office services and supplies to the industry. This close link means that as arrivals to the Caribbean from the UK fall, APD is damaging both Caribbean and UK businesses.”
He noted that “increases in APD since 2009 have had a negative impact on UK-Caribbean Tourism. APD is no longer a tax based on environmental principles. There can therefore be no reason for discriminating against destinations based on distance traveled. For this reason the CHTA passed a resolution in January 2012 asking Caribbean governments through the CTO to explore all available legal options.”
Since 2008, the Caribbean and its community in the UK have consistently sought to raise the issue of APD at all levels of the British government and with the UK parliament. The issue of APD was addressed at the UK-Caribbean Government Forum in Grenada in January 2012. In the action points arising from the Forum, the UK committed to “continue dialogue on issues relating to the APD, in the spirit of cooperation and in the context of the importance of tourism to the economic development of the Caribbean, with a view to assisting the region in mitigating any deleterious effects that the application of the APD may have on its economies”.
The Caribbean hopes that the UK Treasury will consider this action point when making a decision about any further increases in APD and the impact that it will have on a region that it recognizes is tourism dependent.
Collectively, a number of Caribbean prime ministers, ministers of tourism, officials from the Caribbean Tourism Organization and the Caribbean Hotel and Tourism Association have consistently raised the issue of Air Passenger Duty with the UK Government and UK Parliament. CHTA and CTO have repeatedly expressed concern about the negative effect that APD is having on the tourism dependent economies of the Caribbean and on the Caribbean community living in the United Kingdom.
The Caribbean does not believe that APD should be imposed at the expense of the Caribbean economy or its community in the UK and made a formal response to the Air Passenger Duty consultation in June. In summary this made clear that it requires parity in banding with the US and a move to a two band system would address the Caribbean’s requirement if this resulted in equal treatment of all long haul destinations.
The chiefs of BA parent company IAG, Virgin, easyJet and Ryanair have all called on Chancellor George Osborne to ‘suspend the April 1 rises in APD, and those planned up to 2016, while the Treasury commissions an independent study of the economic effects of this job-destroying tax.’ The World Travel & Tourism Council has claimed that abolishing APD would create 91,000 jobs and add £4.2billion to the economy in 12 months.
Introduced in 1994, APD is set to rise again next month. The WTTC said this would result in a family of four flying from the UK to the Caribbean would have to pay close to £400 (US$625.08) in taxes come next month. In 2005, such a family would have paid a total of £80 (US$125.06) in taxes.
Britons traveling on eight-hour trips to the Caribbean pay more APD than if they fly on a near-12 hour journeys to the west coast of the US.
