Barbados and region celebrate APD 'victory'
A collective chorus of cheer went up across Barbados and the Caribbean today, as Britain finally got on board with the region’s persistent lobby for changes to the controversial Air Passenger Duty (APD).
Britain’s Chancellor of the Exchequer George Osborne gave the large Caribbean community in the United Kingdom, as well as Brits who favour a warm regional holiday, reason to start planning their vacations, as he announced a major revamp of the travel tax in his budget.
The changes, which take effect from April 2015, will see the two highest bands of the APD being scrapped, as the tax will be simplified into a two tier system.
Under the new two-band system, all long-haul flights (over 4,000 miles) will be moved into band B, which means British travellers to the Caribbean will pay the same tax as if they were travelling to the United States.
“From next year, all long-haul flights will carry the same, lower, Band B tax rate that you now pay to fly to the US,” Osborne told the British Parliament.
British travellers to the Caribbean will now pay an APD of 71 pounds sterling (about BDS$235) for reduced rate passengers, while the standard rate has been set at 142 pounds sterling (about BDS$470).
Minister of Tourism Richard Sealy, who joined his regional counterparts on more than four visits to Britain to meet with key government and travel figures there, welcomed the news that the UK had decided to “level the Air Passenger Duty following years of concerted lobbying”.
The minister is already eyeing a pick-up in business from the British market which has suffered a fall-off partially blamed on the APD.
“Now that the distorting impact of the tax has been removed, I am confident we will be working with our same loyal and dedicated travel partners to welcome more British visitors in the coming years,” Sealy said.
The good news also made its way into the Estimates Debate, drawing comment from Prime Minister Freundel Stuart.
“So we’ve got some parity with the United States of the America. Our negotiations with the British, and I must pay tribute to the Minister of Foreign Affairs in this regard not only the Minister of Tourism who spearheaded this . . . for the work they have done
in this regard,” Stuart said.
Equally pleased was the President of the Barbados Hotel & Tourism Association, Patricia Affonso-Dass, who told Barbados TODAY: “I think all agencies, whether it be the Caribbean Tourism Organisation (CTO) or the Caribbean Hotel & Tourism Association or individual islands, have been lobbying hard for this.
“It certainly makes the banding more fair.”
She called for tourism players to include the changes to the APD in their public relation campaigns to lure more Brits to the island.
“I think it would be good for us in our PR and information we have out there to let people know that this has taken place and that there is a reduction so that our people can get value for it, “ Affonso-Dass said.
British carrier Virgin Atlantic also lauded the move as a step in the right direction with the airline’s Caribbean regional manager Nick Parker saying: “There’s a growing body of evidence demonstrating the huge economic benefits to the UK of reducing or abolishing the APD.
“Caribbean destinations will also become more attractive, and travel to the UK from the Caribbean more affordable especially when considering the cost savings to vacationing families of four or more. We hope that the Government will continue to go even further in the long run.”
The region had lobbied strongly against the four tier calculation of the travel tax, which though based on the distance from London to a country’s capital, had actually disadvantaged the Caribbean in favour of US destinations, such as Florida, which was charged a lower APD rate than a flight to Bridgetown.
The Caribbean Tourism Organisation, which spearheaded the regional counter-APD campaign, hailed Britain’s decision as “a complete victory for the Caribbean” as it praised the contributions of regional governments, the Caribbean Hotel and Tourism Association, British MPs and peers, the Caribbean High Commissioners in London, the disapora and airline and travel companies.
“We are delighted that the Chancellor has finally accepted the Caribbean’s proposal made in November 2010 to return to the simpler and fairer two band system,” said CTO chairman Beverly Nicholson-Doty.
For its part the Caribbean Hotel & Tourism Association said it was celebrating the decision, while declaring that the playing field had been leveled.
“The Caribbean region has finally achieved one of its goals and will be fairly taxed in comparison to a flight to the United States,” said Richard J. Doumeng, president of CHTA.
“The disparity in the Air Passenger Duty [APD] has been a critical factor leading to the decline in arrivals from the United Kingdom to the Caribbean. With today’s announcement to a two-band system the Caribbean region will no longer be penalized,” added Jeffrey S. Vasser, CHA, director general and CEO of CHTA.