With mounting pressure coming from all around, many of the Caribbean islands have again turned to the safer tourism industry, trying to see how much they might be able to squeeze out this way.
Recently, even tourism has come under fire and in this particular instance it is England that has chosen to start applying what has been described as ridiculously high tax payments in regards to Air Passenger Duty (APD) in flights out of the United Kingdom (UK).
If this Air Passenger Duty is instituted it would cause countless hardships on many Caribbean countries that know the European market is the most profitable as far as tourism is concerned. It is likely that several small island tourism industries will take an incredible hit from this move by the UK. Also the region’s tourism sector will be at a competitive disadvantage to other destinations which were further away but in a band that charged less duty.
In addition, the Band C tax, the area in which the Caribbean falls, is to increase by 50 per cent next year, whereas Band B would increase by 33 per cent.
The fact of the matter is that with the Caribbean having so many financial rugs being pulled from under their feet it can least afford to not take a firm stand against what the United Kingdom has proposed.
It often said that tourism is everybody’s business and at no time does that ring more true that the present. The Caribbean simply cannot afford to have this happen.
Yes, its a tough situation for the region to deal with. But what can it do? Whereas Britain has had some concern for revenues its former colonies, by way of protection of agricultural produce on the world market and preferential treatment, it now has to look at its own purse strings, in the face of a global financial downturn. What option can the Caribbean offer to Britain to bridge its own fiscal gaps? A major argument could be that (in addition to affecting island economies) the tax regime should be reconsidered as more taxation may result in less travelers and less revenue, hence defeating the objective of bringing increased revenue.
Instead of looking at the problem from a myopic perspective, this is where the Caribbean must come together to develop common strategies for marketing the region as one destination; and developing the product as well as looking at ways of strengthening national economies. In thinking outside the box, more consideration should be given for example, on how the region can also strengthen inter-Caribbean tourism, among other things. We have to increasingly make the region more attractive, as tax or no tax, tourists are considering other places of interests or other forms of tourism, such as cruise tourism. It’s a wake up call for the region to also diversify its economy. As far as I am concerned, bigger threats exist for Caribbean Tourism, as the next 911 or natural disaster could happen tomorrow and be even more devastating than the British Tax.
We have had our own issues with passenger taxes too. Or I should say tourists have had issues with attempts by some islands to impose significant departure taxes. It can often be tempting to see how much you can squeeze from the paying travelers before they scream foul! However, the regime in the islands may not rise to the ridiculous level in Britain.