Friday 23 October, 2020

C'bean Tourism Association warns governments about high air travel tax

The Caribbean Hotel and Tourism Association (CHTA) is strongly urging Caribbean governments to be mindful of the adverse effect of high air travel-related taxes and fees on travel demand. 

The CHTA's director general and chief executive officer, CEO Frank Comito, raised the issue while speaking at the International Air Transport Association’s (IATA) Aviation Day Conference in Barbados last Friday. The conference was sponsored by the Caribbean Development Bank (CDB) and the Latin American and Caribbean Air Transport Association.

"We recognise the challenges facing countries, but it is our duty to point out that taxing for additional revenue may have a reverse effect as tourists may choose not to travel to or within the Caribbean and instead select other destinations because of the high cost of our destinations," he said. 

He continued, "The taxes would lead with fewer tax revenues, but the CDB and IATA cited high aviation taxes and fees, regulatory barriers and operational deficiencies as obstacles to stimulating more travel, and by extension economic growth. Theirs and CHTA’s research clearly points to the reduction in travel demand as costs increase businesses would likely suffer.

"High upfront taxes also typically adversely affect on-island spending by visitors who do come. They will either opt for shorter stays or spend less on activities, restaurants, and attractions to offset the additional cost."  

This, he said, is leading to tourists visiting less expensive countries. He strongly that governments pay more attention to this impact of travel and tourism on local economies at such a critical time in the region. 

“We need to incentivise travel on the front end,” he said. “Taxing outputs has proved to be a more successful strategy than taxing inputs.”

“As the cost of family travel increased by hundreds of dollars, travel demand declined, impacting net tax revenue and employment in those Caribbean destinations, which had a high percentage of UK-based and transient travelers,” he said.

Get the latest local and international news straight to your mobile phone for free: