Are the taxes payable to leave Barbados Grantley Adams International Airport now the highest in the region?
Let’s take an example…
Travel ONE WAY from Barbados to St. Lucia on 24th June 2007, with the currently lowest airfare available on LIAT.
St. Lucia base fare US$50
Plus taxes/add-ons
US$7.40 Sales Tax (VAT)
$5.00 Passenger Facility Charge
$27.50 Airport Development Tax
$2.50 Airport Authority tax
$0.37 Airport Passenger tax
$10.25 Fuel and Insurance Surcharge
Total taxes/add-ons payable US$52.12
Now let’s do the same comparison based again on the lowest available ONE WAY airfare from Barbados to:
Bearing in mind below figures indicate ONLY the taxes payable and not the actual airfare.
Anguilla – US$77.35
Antigua – US$63.75
Curacao – US$54.80
Dominica – US$51.50
Grenada – US$56.65
Guadeloupe – US$64.25
Georgetown – US$53.60
Martinique – US$55.10
Nevis – US$66.05
St. Kitts – US$65.50
St. Vincent – US$47.45
San Juan – US$81.75
Santo Domingo – US$106.05
St. Maarten – US$64.25
St. Croix – US$78.30
St. Thomas – US$78.30
Tobago – US$51.80
Tortola – US$69.65
Port-of-Spain – US$52.75
Can any BFP readers identify any other Caribbean territory where the taxes and add-ons are higher?
Adrian Loveridge
30 Comments
June 30, 2007 at 5:47 pm
Adrian,
The taxes added to Barbados tickets are among the highest in the region but don’t forget that most Caribbean destinations still collect the departure tax at the check-in counter. When you add the USD$20 to $25 departure tax to most of those tickets they come surprisingly close to Barbados
June 30, 2007 at 7:54 pm
All i have to say about this a/p/tax is dat it it a fast. To tell u d truth it int doing anything for the poor people of barbados. So where is the money going? I really dont think much of the new airport it is awful compared to the airport in jamaica.
June 30, 2007 at 8:05 pm
The Plumber…
fair point BUT how many of the other Caribbean destinations also have a
1. 15% VAT
2. Passenger Facility Charge
3. Airport Authority Tax
and
4. Airport Passenger Tax
ONTOP of the Airport Departure Tax.
Just how many taxes can you reasonably collect
on a journey to St. Vincent (127 miles) St. Lucia (121 miles) Grenada (171 miles) Dominica (209 miles) Antigua (319 miles) etc.
MILES quoted are issued by OAG.
Secondly, LIAT has imposed a standard fuel and insurance surcharge of US$10 on each one-way journey.
Has anyone actually calculated the cost of fuel for a Dash 8 flying full from Barbados to say St. Lucia?
And exactly what does the insurance charge element cover?
June 30, 2007 at 8:22 pm
With the high *** departure taxes, does Barbados still depend on Tourism, or is there some other industry that has taken over, so it doesn’t matter if tourists come or not?
I think the people living in Bim will be the ones to feel the pinch of the shoe having to pay such high taxes to leave the country. But does the Government really care? I doubt it!! Those living outside of Bim could find other islands to visit, and to be quite frank, much closer than Barbados.
June 30, 2007 at 9:34 pm
Barbados is a Tourism dependant Country. High Airport taxes will negatively affect some markets especially those in the Caribbean.
There are not enough rich Tourist from the major markets to allow Barbados to ignore those with limited finances.
In the present competive environment the Airport Tax should have gone down not up.
June 30, 2007 at 9:44 pm
Not that this is directly connected, but does everyone know that the BARBADOS PORT AUTHORITY has now instituted a $77. 00 fee for every 20 ft container coming into , going out and intransit, and $154 .00 for a 40 ft container. In addition to this , there is also a 6% levy on the fee. God help Barbados
June 30, 2007 at 11:54 pm
Juss so you know…. Anything that is privatized becomes more and more expensive overtime if it is a monopoly…
The little part about turning GAIA into GAIA Inc. means you can expect to pay more years from now too….
July 1, 2007 at 12:01 am
P.S. anyone see that Puerto Rico is taking notice of Barbados trying to take away from their Home Porting cruise business???
—
Article: Cruise tourism strong in San Juan – by John Collins
Date: Article Published on: 2007-06-13
Source: http://www.CaribbeanInvestor.com – Caribbean Investor [dot] com
Link: http://www.caribbeaninvestor.com/article.shtml?browser_query=varticle&field=5747
-SNIP-
Veteran Jose Busto urges support for sector as aggressive competition in Caribbean increases.
SAN JUAN, Puerto Rico, June 13, 2007. CaribbeanINVESTOR — Cruise tourism is booming in the Caribbean but San Juan ranked fifth in the amount of money earned from it last year. Veteran Jose O. Busto, the chief executive officer of Continental Shipping is concerned about Puerto Rico’s future role in cruise tourism and doesn’t mince any words about.
“We have tremendous and unlimited potential but there is no initiative or desire to encourage cruise tourism,” said Busto who has a combined experience of half a century in shipping. “If we don’t grab our share we will unfortunately lose out to other more aggressive destinations.”
[ . . . ]“The ships are getting bigger and bigger and that means more passenger volume. Another factor that Busto points to is home porting. “Right now both Santo Domingo and Barbados are both developing as home ports,” he said. “They know that the longer vessels stay in port translates into more money spent as well.”
Indicating that the cruise lines analyse the passenger questionnaires closely, Busto said they show that among “the top complaints are that the tour selection in San Juan is not so hot, that the shopping is so and that the port facilities could improve.”
-End SNIP-
July 1, 2007 at 1:42 am
Adrian…
Don’t get me wrong, I am not defending the level of the tax but in the interest of fairness I need to correct what you are implying.. you said
…fair point BUT how many of the other Caribbean destinations also have a
1. 15% VAT
2. Passenger Facility Charge
3. Airport Authority Tax
and
4. Airport Passenger Tax
ONTOP of the Airport Departure Tax.”
The facts are:
Barbados has
1. VAT
2. Airport Development Tax
3. Airport Authority Tax
Most Eastern Caribbean airports have
1. Sales Tax/VAT
2. Passenger Facility Charge/Security Charge
3. Departure Tax paid after check in
The BGI airport authority tax is the standard $2.50 Security charge. VAT is 15% in most countries while sales tax is 10% in others. The only difference is therefore the quantum of the BGI Airport Devleopment Tax vs. the Departure Tax at other airports.
There are no additional tax headings in Barbados.
There are also many persons out there who are not aware of the user fees and excise taxes which is tacked onto tickets to and from the US, Canada and Europe.
In fact in the true spirit of user fees, international passengers are charged an arrival tax at US airports!!
According to the state department website the tax headings are:
1. U.S. Domestic Transportation Tax – 7.5%
2. Federal Flight Segment Tax – $3.00
3. U.S. International Departure Tax $13.40
4. U.S. International Arrival. Tax – $13.40
5. Passenger Facilities Charges (PFCs) – $4.50
6. Federal Security Segment Tax – $5.00
7. Immigration, customs and Animal/Plant Health Fees
UK is now at 40 pounds for Deaprture Tax
July 1, 2007 at 8:29 am
Mr Plumber,
Please refer to my initial comments which apply to the REGION, the Caribbean. They were NOT meant to compare with any other taxes levied in the US, Canada or UK.
Also you missed off one of the 4 add-ons I mentioned and just remind me, which Caribbean countries currently levy 15% VAT on airline tickets?
July 1, 2007 at 11:50 am
A quick comparison of similar fares at LIAT will give you this info…
Barbados-Trinidad-Barbados: $89 each leg, BGI to POS “Sales Tax” $13.35, POS to BGI “Sales Tax” $13.35
Barbados-St.Vincent-Barbados: $76 each leg, BGI-SVD Sales Tax” $11.40, SVD-BGI “Sales Tax” $11.40
These are just two examples to illustrate similar VAT or Sales Tax on tickets
July 1, 2007 at 1:04 pm
Final word on this…
A check with some trial bookings at liatairline.com shows that for one way tickets out of Barbados the follwoing is constant:
15% Sales Tax (VAT
$27.50 Airport Development Tax
$2.50 Airport Authority Tax
For some Destinations additional charges appear under the heading of Passenger Facility Tax and Airport Passenger Tax and in some cases additions to the Airport Authority Tax.
These additional taxes appear to be user fees levied by the destination and have nothing to do with Barbados. They are in fact “arrival taxes”
July 1, 2007 at 1:25 pm
Adrian and The Plumber, your research is interesting, and as a person that travels the region on a regular basis I know BGI taxes are some of the highest.. Out of Interest Adrian have you been to St Kitts recently, they have a significant departure tax on departure plus airport development etc. St Maarten also has a tax of US30.00 payable on departure… that was in effect even before their new airport was opened, and was not increased with the new facility.
Inter island travel has helped to develop businesses throughout the region and something needs to be done, one suggestion is the introduction of a special caricom residents tax ( used to be done in St Lucia but abandoned) where residents are charged a reduced rate.
Barbados as a hub for major airlines and the location of the US consular offices for the eastern Caribbean region has received criticism (justified) for the new charges…. I am sure that GAIA inc will say they have to pay for a new airport, but if we scare away our customers we collect less money what do you do then raise it again????
July 1, 2007 at 1:37 pm
??
We are on the same page.
I flew to St. Maarten in May of this year and suprisingly we did not have to pay the US$30 departure tax. Maybe the airlines have hidden it in the ticket (US$459 return from BGI).
But what a great new airport. Easy to use and very well laid out from a travellers perspective.
I havn’t been to St. Kitts for about 5 years.
The increase in departure tax and criteria change of age and intransit passengers will give GAIA Inc., around BDS$90 million in revenue per year.
I understand the improvements to the airport cost around BDS$200 million.
I would have thought they could have fazed the increase in over a period of years.
They have other revenue generators like the car park and shops. Remember they also DOUBLED the cost of parking.
The result is reduced intra Caribbean arrivals and that has a direct cost to Goverment in tax collection of at least US$128 per person, based on average spend and stay.
July 1, 2007 at 1:58 pm
You are lucky you didn’t have to pay dep tax in St Maarten. I travelled LIAT and had to pay before I could receive my boarding pass. It is a lovely new airport inSXM and a significant improvement on the old one…… Nice shops too though a bit expensive…. hand made chocolates etc.
July 1, 2007 at 1:59 pm
Good day Mr Loveridge,
I appreciate your informed questioning of Government policy and actions especially in relation to the tourism sector. I think that Barbados is better for your efforts.
However in your post you wrote “just remind me, which Caribbean countries currently levy 15% VAT on airline tickets”. The implication being that taxes levied on tourism related activities in Barbados are not only too high but unreasonably so when compared to other countries in the Caribbean. On reflection don’t you think that it should also be noted that few (if any) other Caribbean countries provide, inter alia, all of the following -
1) state provided primary, secondary AND Tertiary education for all its citizens.
2) state provided school meals in all state run primary schools.
3) state provided text books in all secondary schools.
4) state provided medications for most chronic ailments (like the three medications for my child’s asthma and the chemotherapy medication for my aged parent)
5) state provided health services at polyclinics and hospitals including maternity, orthodontic services (so I am told) for children in school, radiotherapy service, psychiatric care etc.
6) state subsidised housing via NHC type housing units and developments.
7) state provided playing fields and courts (some with flood lights) along with coaches.
9) maintenance of public spaces like beaches and parks along with a life guard service.
10) state provision of coastal zone protection and remedial works by institutions such as the Coastal Zone Management Unit.
11) state provided home care for aged infirmed ciitizens through institutions such as the National Assistance Board.
Note that I have NOT used the word “free” as all of the above services are paid for by our taxes. When I juxtapose this fact with the observation that no Government in my memory has ever posted a surplus on current account (i.e a policy of deficit spending which also brings to mind a debate between former PM Sandiford and the present PM Arthur on what is an appropriate level of deficit vis a vis GDP), I grudgingly (who likes to pay more?)question your argument for a reduction in the VAT on airline tickets.
Otherwise, all success in your business ventures (Peach and Quiet?) and keep the questions zinging at the heads of the tourism officials.
July 1, 2007 at 2:04 pm
The Plumber…
And I thought you were trying to be fair and accurate?
The ACTUAL Sales tax (or VAT) payable on ONE way tickets purchased at the lowest fare on LIAT’s website to travel to Barbados from the following destinations are:
Anguilla – US$10
Antigua – US$7.80
Curacao – NONE
Dominica – US$4.28
Grenada – US$6
Guadeloupe – NONE
Martinique – NONE
San Juan – NONE
St. Maarten – NONE
St. Croix – NONE
St. Lucia- US$3
St. Thomas – NONE
Tobago – US$9.30
Trinidad – US$9.30
So I will return to my orginal question ‘ Are the taxes and add-ons charged to depart from GAIA the highest in the region’ ?
(Mr Plumber – thats this region, the Caribbean).
July 1, 2007 at 3:37 pm
The logic for lowering tax on Airline Tickets is so that Barbados can be more competitive at the lower end of the market.
Rich Tourist will not always chose Barbados for their vacations.
“Caricom” tourist and Canadians have cheaper options like Florida,Cuba and the Dominican Republic.
Barbados should keep balance in the Tourism product.There could be fewer Rich British and American Tourist travelling after yesterday’s attack in Scotland.
July 1, 2007 at 4:24 pm
Hants…
Totally agree, and its especially important in the long eight summer months.
Very few of us have a problem in the winter but it is a big challenge in the summer. You either accept bottom-end mass British tour operator business at knock down room rates or you try and find and cultivate alternative markets.
Caribbean people travel year round and thats why the market is so important.
The BTA has brought back (again) the discounted Best of Barbados programme which effectively subsidises EVERY single American, Canadian or Brit that books the package.
US$200 air subsidy per person.
One night accommodation free.
Daily free breakfast and large discounts off activities etc.
The net fiscal benefit to the country is very limited.
July 1, 2007 at 10:31 pm
Adrian,
I give up!! What is the point of quoting Sales Tax figures for the lowest available fare which is highly variable depending on the day of the LIAT booking.
Ticket sales taxes are usually a percentage of the fare therefore the information is useless unless you quote the percentage or the actual fare being compared.
Earlier I gave you two examples where the sales tax or VAT is exactly equal to Barbados – 15% in both Trinidad and St. Vincent. The hiding of additional airport taxes has become a science practiced by Governments to conceal the high charges to the unsuspecting traveller
Let’s use the St. Lucia example which you began with using a USD$77 ticket on each leg:
Barbados charges 15% of the ticket price, plus USD$30. St. Lucia charges 7.5% of the ticket price. However, a $5 Passenger Facilities charge and a $0.37 Airport Passenger tax appears on the inbound into St. Lucia. On the return a $1.50 Passenger Facility Charge, $4.82 Airport Passenger Taxes are added to your ticket and $22 Departure tax paid at check in. In summary, for a $77 US each way ticket, Government of Barbados gets $41.55 and St. Lucia collects $39.47…a difference of $2.08.
A similar exercise with a Trinidad fare shows a $4.00 dollar difference.
So to answer your question, Barbados Government taxes are higher than St. Lucia or Trinidad. Is the $2.08 or $4.00 difference on this ticket tax enough to single out Barbados for high ticket taxes in the region? Only you can decide..
Unless you have all of the info regarding departure taxes etc. it is impossible to compare these taxes fairly. That’s all I’m trying to say.
July 1, 2007 at 10:34 pm
Adrian
Isn’t BOB being replaced this winter… I’m sure I heard that somewhere?
July 1, 2007 at 10:38 pm
Gentlemen,
The point must be that if CSME is ever to work the people within the single space must be able to afford moving around it, or it will be another non-starter.
We may as well opt for ASEAN or EEC as our economic partners, for what good it will do the man in the street.
If we can’t afford to access the extended markets, the idea of any trading bloc, however small, simply will not be acceptable to the majority of our islanders, imprisoned as they are by unaffordable airfares, howsoever they are subidised by our governments, to a monopolistic private company.
CSME needs a complete rethink.
We are seperated by 100 miles of sea from our nearest partner, but to fly there for a day trip is an average Bajan’s weekly wage.
This is not what anyone could call a single space!
Alternative methods of transport must be explored to make this pipedream a reality.
Whether it is 6 Vomit Comets, a la Trini- Tobago, or a regular conventional inter-island ferry service, some method of transport must be agreed on to make the wholelarger market idea viable, economical and publicly acceptable.
July 2, 2007 at 8:36 am
The Plumber a.k.a. Anonymous
‘These are just two examples to illustrate VAT or sales tax on tickets’.
Thats the point I was trying to get across.
The VAT and sales tax is NOT similar or the close to the same across the various destinations.
In many cases there is NO VAT or sales tax.
The Prime Minister of St. Vincent and the Grenadines currently chairs the CariCom air transport committee and is quoted in the Advocate today as trying to find a solution to bring down intra regional airfares.
I am attempting to illustrate WHY they are so high and that our Government can only extract so many types of taxes before they act as a deterrent to people travelling at all.
Intra regional travel is also very important to St. Vincent and the Grenadines. You have probably noticed their series of print ‘ads’ appearing in the press currently (sadly with the wrong website address).
??
According to the PR Wire press release the 2007 Best of Barbados programme is operating 1st September until 15th November.
I am not sure about the winter.
July 3, 2007 at 5:31 am
Adrian, the Best of Barbados program offers booking dates of July 1 to Aug. 31, 2007, for travel from Sept. 1 to Nov. 15, 2007.
All travelers worldwide are paying lots of tax via their airline ticket. We have quite a few taxes added into air tickets here in the U.S. as mentioned here in the blog.
What many travelers to the Caribbean dislike is having to pay departure taxes out of pocket at the airport – and Barbados is expensive!
And in reply to the “booming” Caribbean cruise market – the market has been flat for a couple of years. I’ve seen several articles that mention Caribbean cruise business is up, however it must be noted that any increase is up from a loss of within the last couple years.
From my business perspective a boom is when I see an increase on top of expected profits, not trying to recoup losses. But I guess it all depends on the “spin”.
As I mentioned in a previous post, the cruise industry is currently looking to Europe for a more profitable season.
July 3, 2007 at 8:18 am
Thank you Linda..
What is your view of the Best of Barbados programme?
Yes! I have been watching the Caribbean cruise market and also notice that several ships are also being re-positioned to the Middle East (Dubai).
Is the only option open to us to sell Barbados at below actual cost (Best of Barbados) ?
July 6, 2007 at 3:57 pm
[...] post by BFP and software by Elliott [...]
July 10, 2007 at 7:27 pm
Hi Adrian,
The Best of Barbados program is an opportunity to introduce new visitors to the island.
It is interesting that many of those who have not traveled to Barbados feel that the program prices are still rather high – compared to lower cost destinations. Another draw back is the time spent in traveling for those from the Midwest and Western states – in other words they do not want to spend 2 days of their 7 day vacation traveling.
Most of my client base that travel to Barbados spend more than one week – so the program restrictions for 5-7 days does not work for them.
I use the program to qualify travelers who love a bargain to a new destination, but who have the ability to spend more once they arrive, and will return for a longer visit.
Barbados has something to offer every traveler, but Barbados is only a great destination for the American traveler who is not restricted to a tight budget.
The Canadians and British are longer term visitors and know how to make the island work for them, but many Americans tend to want everything, while paying very little.
July 10, 2007 at 8:17 pm
Linda…
Many thanks for your insight.
Is there anyway you can estimate the percentage of the first time Best of Barbados clients that book become regular visitors (ie: conversion rate).
Last winter our little hotel experienced a 96% occupancy rate and at rack rate. Its difficult to do better than that because of the overnights we have to Mustique, Bequia, Palm Island, Dominica etc.
At least 20% of our guests use their MILES to reach us and we have noticed a substantial increase in Americans from the West Coast and Mid-West. The miles THEY need are the same as peope for eastern Gateway airports.
Californians seem to be used to travelling an entire day to get there and get back and remind me again, what is the population of CA? (20 + million)
Using their miles then, the only issue is what they are paying for the land package.
We negotiate with attractions, car rentals etc, and agree a net non-commission rate and then put it into a package that gets us rack rate and the clients a substantial saving on ‘extras’. It works for us.
The tourism services don’t mind either as often they are paying tour reps/tour companies up to 50% off the published price in commission.
I agree with you that Barbados is not cheap for Americans BUT and its a BIG but, price is not always the issue.
The largest issue is obtaining VALUE FOR MONEY.
Thats why I think we do well in the US market and you might have noticed TripAdvisor thought so too by awarding us the Caribbean Bargain Award in 2006.
Thanks Again
July 10, 2007 at 9:25 pm
Do you recognize that no Minister, Parliamentary Secretary, PS, DPS, Chairman of a Board, CEO of a Public Corporation, MPs or anyone holding an official or diplomatic passport is required to pay departure tax in Barbados. This also extends to teh spouses of Ministers and MPs.
Do you really feel that Barney or Owen cares about us?
July 12, 2007 at 2:13 am
Many of our travel clients have not been able to use their frequent miles (depending upon the program) especially in the winter months. For those who don’t run into restrictions, the savings is obvious.
Though we specialize in Caribbean travel, most of our California clients are traveling to Hawaii, Mexico, islands throughout the Pacific, or opting to visit family and friends in the U.S.
I certainly agree that price is not always the issue, but budget conscious travelers are limited to what they can spend, and the Bahamas, Jamaica, Mexico and the Dominican offer extremely cheap vacations, along with good flights.
As for the percentage of first time Best of Barbados clients that return to the island, it appears to be around 15% for 2006. These clients usually invite their friends and families to join them on their next trip, and those numbers are not factored in. The program got off to a slow start, but we currently have many bookings towards the end of the program dates.
Our agency profile for travelers to Barbados continues to be the upscale client. Upscale travel continues to be the best travel market, while the more budget conscious are requesting vacations here in the U.S., Mexico and other cheaper and closer destinations.
The economy is not great here in the U.S. for most Americans. Jobs are being sent overseas, food and gas are high, the housing market is in big trouble with loan defaults, and the value of the dollar is down. And lets not talk about the trillions of dollars being spent on war. So with that said, money is a real issue with the average American.