The Caribbean tourism industry may well have been thrown a lifeline by what now appears to be an imminent review of Britain’s controversial Airline Passenger Duty (APD) which came into effect on November 1 last year and has already impacted on ticket costs to the Caribbean.
Indeed, the decision by the British government to freeze the APD at its current level while entertaining a review of the mechanism in response to queries from the region is being hailed as a triumph for ceaseless lobbying by Caribbean governments and regional business interests in the United Kingdom.
It had been stated that the APD would affect travel to the region and further injure a tourist industry already badly affected by reduced demand resulting from the global economic and financial crisis. The crisis had seen sharp travel cuts to the Caribbean from Britain had galvanized governments and the Georgetown-based Car-ibbean Community (Caricom) Secretariat into a vigorous lobbying initiative which had been successful in recruiting both business and political interests to its side.
Last week, Conservative Party Member of Parliament Julian Smith told a Caribbean Question Time meeting of British parliamentarians in London that the strength of the regional lobby may well result in a favourable resolution of the complaints from Caribbean governments over what they perceive to be inequalities in the new excise duty being paid by airline passengers travelling from airports in the UK and which is levied according to groups of countries and based on the class of travel used. Caribbean governments are contending that the rate of duty – a so-called green tax — being levied on passengers travelling from Britain to the region is higher than that that which passengers travelling to the United States have to pay despite the fact that destinations in the United States are further away.
Jamaica, particularly, is being credited with being at the forefront of the lobby with both Prime Minister Bruce Golding and his Tourism Minister Edmund Bartlett having held meetings with British ministers and other parliamentarians on the matter.
Last November, the British government introduced a band structure based on geographical distance from London to replace four rates of duty – twenty pounds for specified European destinations and ten pounds and forty respectively as reduced rates for the rest of Europe and other destinations. Guyana, along with several other Caricom countries, has been placed in Band C which attracts an APD of one hundred pounds sterling. Efforts by Caribbean governments to persuade Britain to stay the November 1, 2010 implementation of the APD fell through despite vigorous lobbying which began in 2008 and peaked during the 2009 annual World Travel Market Trade Show in London. As part of the process several British MPs have been pushing the argument that the APD discriminates against the region in favour of the United States.
As a regional grouping Caricom Heads of Government have already declared that the APD is likely to prove damaging to the region at a time of falling visitor arrivals. Caricom Tourism Ministers had also noted what they regarded as the irony of the APD being imposed on the world’s most tourism-dependent region and on countries whose carbon emission rates were significantly lower than that in other parts of the world.
Earlier this year Britain’s Chancellor of the Exchequer George Obsorne announced in his 2011 budget that the planned increase in the APD would be reviewed, a move which the Conservative MP Julian Smith suggests might have been due in part to the effectiveness of the Caribbean lobby. Arguments that had previously made for a removal of the Caribbean from the Band C category had centred on, among other things, the fact that, tourist travel apart, Britain was home to an estimated 800,000 Caribbean people, many of whom maintain regular contact with family and relatives in the region through periodic travel.
Concern over the likely impact of the APD on travel between Britain and the Caribbean coincides with the no less worrying issue of intra-regional travel. Caribbean nationals, including businessmen keen to take advantage of the Caribbean Single Market have been calling for both improved intra-regional air communication as well as reduced travel taxes. Regional air travel woes have been further aggravated in recent years by rising fuel costs and operating losses by regional airlines the most recent examples of which are the Air Jamaica crisis and LIAT’s ongoing crisis of unprofitability. The Caribbean Tourism Organ-ization (CTO) estimates that contractions in the global economy on regional airlines have resulted in a drop in regional travel of around 30 per cent over the past decade.