Lack of Airline Competition, Taxes, Global Economic Downturn Choke Tourism in the Caribbean.

(Dive Travel Business News - January 25, 2012) -- At the 30th anniversary opening of Caribbean Marketplace 2012, held January 22-24 at Atlantis Paradise Resort Bahamas, President of the Caribbean Hotel and Tourism Association (CHTA) Josef Forstmayr spoke to the dirth of competition in the regional airline industry  that is stifling the tourism sector resulting in outrageous ticket prices and an ill-conceived network, lacking a true regional airline system. 

Addressing hoteliers, travel agents, tour operators and buyers from the regional and international community at the official opening of CHTA Caribbean Marketplace 2012, Forstmayr remarked that the CHTA estimated that in 2010, the Caribbean governments collectively paid US$45 million to secure airlift, only to find that the situation is still inadequate and way too expensive for visitors.

Forstmayr went on to say "Too often, we hear that long lines, antiquated bureaucracy and surly attitudes are commonplace in our islands ...this is not acceptable,"

In his keynote remarks at Caribbean Marketplace 2012, the Director General of the CHTA, Alec Sanguinetti said that the industry is having its worst period in its history due to the ongoing global financial crisis and government taxation policies:
“The industry I would say is threatened and unfortunately because of the contracting of government revenues because of the downturn in tourism (and) now tourism has become the bulls eye for taxation.” 

Sanguinetti said the result has been governments increasing taxes on room nights, increasing taxes on air tickets, and a number of Caribbean governments are now looking at putting taxes on service charges. In the meantime, the average daily room rate revenue in the Caribbean is down 15 to 20 percent compared to 2006.

"We need some relief," said Sanguinetti.

Britain's air passenger duty (APD) on flights to the Caribbean has created another barrier to tourism. British APD to the Caribbean has increased every year in line with inflation since 2007 and is already up to 8.5 times more than the European average. The Caribbean is the only region in the world to present London with proposals outlining the impact that increased APD taxes would have on regional destinations. With that report, Britain has agreed to hold off increases in APD to the Caribbean for one more year.

Before November last year, each economy class traveller to the Caribbean paid £50 (US$77) in APD, but that tax was increased to £75 (US $115) - the second in as many years. The levy for premium economy, business and first class passengers rose from £100 (US$154) to £150 (US$291).

The impact of increased taxes on tourists is already apparent with airline arrivals and land-based tourism from the U.K. The cruise lines have recognised the potential impact with several cruise lines announcing the re-position of ships out of the Caribbean in 2012.

Sanguinetti said that there was need now for greater collaboration between the regional private and public sectors.

“We need to re-tool our industry. There are things that are within our control to fix which we need to do and the longer those policy issues are ignored the more serious it will be not only for the hotel industry but for the entire tourism industry,” said Sanguinetti.

The Caribbean remains the most tourism-dependent region in the world.
 

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