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11th hour

BHTA not holding out much hope of an APD policy change in upcoming budget

As British Chancellor George Osbourne prepares to deliver his budget in the British Parliament in less than 48 hours’ time, Barbados and other member states of the Caribbean Tourism Organisation (CTO) were today holding out hope of an eleventh hour change of heart on the dreaded Air Passenger Duty (APD).

In a statement today, the CTO noted that the levy, which is charged on flights between London and the Caribbean, was due to increase again on April 1, amounting to a total 85 pounds sterling hike in duties since 2009 (US$140 per person).

The Barbadian-based regional body also said it would be “listening carefully to see if the Chancellor is yet prepared to recognise the widespread concern that exists in the Caribbean and among the Caribbean community living in Britain about the damage being done and the lack of fairness in the way in which Britain’s Air Passenger Duty (APD) is applied”.

However, the president of the Barbados Hotel & Tourism Association Patricia Affonso-Dass told Barbados TODAY she was less than optimistic that Britain would roll back the APD at this stage.

With the April 1 changes, the APD itself would have increased 70 per cent since 2009. This compares to an increase of just £2 (US$3) or 18 per cent from London to Europe and £24 (US$40) or 53 per cent to the United States.

Affonso-Dass described the move as simply “bad news” for the region. And while she could not speak specifically to the direct impact on local hotels, she stressed that anything that increased the cost of a vacation was deleterious.

“When you start adding up for a family of four traveling out of the UK, when you start to look at adding an additional four hundred pounds [sterling] to the cost of the travel, it is a significant amount and what it does do is that even if there are people that will still come or the people that are still coming, it reduces their ability to spend on the island so they will be spending less . . .  going out less, doing fewer attractions,” she explained.

The BHTA president said hoteliers had been forced to take aggressive action to maintain their presence in the British market, where “we are having to do a tremendous amount of discounting”.

“It is having an effect on our revenues and that coupled with the high cost of inputs locally, the high taxes, we are continuing to lobby for the removal of duties on a range of items so that we are in line and can compete fairly with Sandals for example,” she said.

With regional governments currently leading the regional lobby against the APD, the BHTA head took as swipe at them as she warned the region that it should not be pointing fingers when it has failed to cut what she called “onerous taxes” on travel.

“We need a complete relook at the cost of travel both from persons coming into the region and coming from the region. This needs to be something that we continue to pay attention to, that we put on the table, and that we encourage the Governments across the Caribbean to be vocal about,” she said, adding that “I don’t think we have a concerted effort that could be put behind the lobby”.

Meantime, the CTO has pointed out over a number of years, the current structure sees duty on flights from the UK to Miami, Florida charged at lower rates than that on flights to Bridgetown, Barbados even though they are the same distance from London.’

“Moreover, even though Hawaii is 3,000 miles further away from London, the duty on flights there is also lower than on those to the Caribbean.

Osborne, who leads the British Treasury, noted the anomaly in the four-band structure of APD in his 2011 budget speech, when he said: “. . . We are consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California.”

“Despite this, and a lengthy consultation in which the Caribbean participated, no change has been made to the discriminatory aspect of the duty,” the statement said.

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