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Barbados Needs Lower Intra-Caribbean Air Taxes To Help Level The Playing Field Between Cruise Ships, Air Travel And Island Hotels

barbados-cruiseship-boarding.jpgAt a time when various Caribbean Ministers of Government have recently met and agreed to levy yet another tax on intra Caribbean air travel, its time perhaps for them to contemplate exactly the effect its having on land based tourism.

A seven day cruise departing from Barbados was recently advertised with one of the largest companies, taking in St. Lucia, Antigua, St. Kitts, Puerto Rico, St. Thomas, Dominica and back to Barbados.   With a lead-in price from US$449 per person plus mandatory gratuities, Government fees and taxes, it represented what many might consider outstanding value-for-money. Especially as when you consider most meals, and other features like entertainment are included.

Of the overall total cost, an amount of US$55.42 per person is shown as Government fees and taxes.   Now let’s say you were the same person considering visiting our Caribbean neighbours and taking the cheapest published airfares between point to point, what would you pay in Government taxes and add-ons?

Barbados-St. Lucia US$61.87; St. Lucia – Antigua US$82.57; Antigua-St. Kitts US$42.10; St. Kitts – San Juan US$52.70; San Juan – St. Thomas US$34.50; St. Thomas – Dominica US$33.00 and Dominica- Barbados US$25.38!

Barbados Grantley Adams International Airport

Barbados Grantley Adams International Airport

So a massive US$332.12 per person in taxes and add-ons to visit the same number of destinations by air! In fact this figure is even higher, because some governments are not yet including the departure tax in the ticket price.

Now what about the overall contribution to the region?   Well we know many of the ships are not registered in the region. We know they largely employ extra-regional crew and officers, who as far as I am aware contribute little in national insurance contributions, income or other taxes to the Caribbean.   The overwhelming percentage of what is consumed onboard is sourced outside of the Caribbean.

And finally, where does the lion’s slice of the revenue and profit generated from the world’s largest cruise market go?   Of course, outside the region!   On the other hand, the almost dominant regional airline has been subsidised over decades by the Caribbean taxpayer. The reason we are told the departure taxes are so high is because we need to upgrade the airports, but wait a minute, don’t we, and haven’t ‘we’ upgraded the ports as well?

How can anyone reasonably argue for airports to extract more than six times the amount in taxes than our ports do?

For the ship cruise operators, when the going gets tough, all they have to do is haul the anchor and sail off to Alaska, Dubai or the Mediterranean.   Hoteliers and other land-based tourism partners sadly do not have that option.

I am not, repeat not advocating against the cruise ships and their recognised contribution. But simply asking the playing field to be levelled to a degree where we can at least think of competing and surviving in these troubling economic times.   Yes! There have been repeated calls for hoteliers to lower their rates and make them more affordable to Caribbean Nationals, while at the same time considerable pressure has been placed on them to maintain employment.   Most of recognise the desirability of having a truly pan Caribbean marketing campaign, but don’t do it at the expense of an already barely viable accommodation sector.

Adrian Loveridge

30 May 2009

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