Regional tourism-dependent economies continue to feel the stress of the global economic slowdown. It is a slowdown that is severely impacting our neighbours in a way that we in Trinidad may find it hard to imagine. Last October, an IMF report reminded us that Caribbean countries are among the most highly indebted countries in the world with five of the thirteen Caribbean countries having public debt-to-GDP ratios of more than 100% with an additional four having debt levels above 70%.
Unfortunately, to pay their bills, some of our neighbours have to tax tourism but in a way that does not scare visitors away. In early May, St Lucia announced a US$35 / EC$ 95 / TT$224 Airport Development Charge on all flights. So a family of four flying even transiting through St Lucia would have to find nearly US$140 extra. LIAT explained that “taxes and charges paid on LIAT tickets may in some instances represent more than 50 per cent of the ticket price”. Last week, I was in beautiful St Kitts (not for cricket) and on departure, paid EC$4 for an Island Enhancement Tax, EC$5 as a Security Service Change, US$1.50 as an Environmental Levy and EC$45 as an Airport Service Charge. This adds up to about US$22 in charges per person. Come July 1st, this increases by about US$15 to about US$37 / EC$100 /TT$236 per person.
To maintain destination competitiveness, it would help if basic fares would fall in a way that at least helps to compensate for these tax increases. This is perhaps why there was so much excitement when REDjet paid a surprise visit to St Kitts on May 17th. St Kitt’s Tourism Minister spent some time dispelling rumors that REDjet was to start flying between Barbados and St Kitts. Rather, REDjet was simply operating a charter-flight for the West Indies Cricket Team ahead of the Digicel 2011 series. The Minister of International Transport went on to say however, that REDjet will be allowed to land in St. Kitts any time despite there being no immediate plans for a scheduled service.
This is the level of excitement or desperation in our tourism dependent economies. Cost effective air travel is desperately needed. Our fellow citizens in Tobago know what it is like to be a tourism dependent economy that appreciates the value of cost effective airlift. From July 6th, LIAT will suspend services to Tobago. Some estimates put the decrease in available airline seats over the last 5 years to Tobago at between 30% to 50%. Airline seats are a key component of any destination’s offering.
The loss of LIAT comes at a bad time for Tobago tourism. Much of Tobago’s flights out of Europe are shared flights in that they stop first in a neighbouring island before landing in Tobago. Within recent times, Tobago has lost one of its weekly shared British Airways flights out of London Gatwick so there are now only two per week. Tobago has also lost its shared Martin Air flight out of Amsterdam. Condor out of Frankfurt flies its shared service to Tobago only once per week rather than twice as before. Monarch out of London Gatwick is also down to one per week rather than the previous two. Even though there is now a New York City service operated by Caribbean Airlines, and Virgin promises to add an additional shared service flight, capacity into Tobago is drastically down from previous years. From the point of view of tourism stakeholders here in Trinidad and Tobago and the wider region, the sooner REDjet comes, and the sooner Caribbean Airlines deploys the new ATRs, the better.
I am told that there are some, like Lelei LeLaulu – Vice President of the Caribbean Media Exchange, who argue that Caribbean, Latin American and African nations should treat air transport links as they do national highway systems. Air links to and from our source tourism markets are as important to our islands development as links between towns and villages. As such, investment to bring airlines into the destination or to subsidise routes could be seen as government infrastructure projects and treated accordingly. By creating strong, reliable and cost effective air links, we all stand to benefit.
Federal Tax Singapore
My name is Derren Joseph and I love my country. As always, I end by saying that despite our challenges, we are so blessed to live in this beautiful land. Let us continue to have the audacity of hope in the future of our beloved country.
Derren is a travel and tourism consultant. The views and opinions expressed here are solely the views of the writer and do not necessarily reflect the views of any company or institution affiliated with the writer.