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Caribbean holiday industry increases taxes on tourism sector as it struggles with rising APD tax

The Caribbean holiday industry in under pressure as a result of the UK's rising Air Passenger Duty (APD). Because of this ever-increasing tax two Caribbean islands, Jamaica and Antigua have introduced new taxes on their own tourism sectors to recoup some of the losses incurred. Following the recent Caribbean Tourism Summit the region's leaders have agreed to work towards a more aggressive co-ordinated lobby strategy in order to have the APD reversed.

Caribbean holiday industry increases taxes on tourism sector as it struggles with rising APD tax

While Caribbean holidays have long been favoured by British travellers, the rising Air Passenger Duty (APD) tax poses a very real threat to this standing with a family of four booking their holiday in the Caribbean from the UK standing to pay as much as a £324 in APD for an economy flight, a drastic increase from there mere £40 it cost 2007.

As a result the Caribbean region has been struggling to come to terms with the fallout of the rising APD tax, with government officials in two Caribbean islands- Jamaica and the twin island nation Antigua and Barbuda forced to introduce new taxes to their respective tourism sectors in order to counteract the losses incurred.

Officials in Jamaica recently announced that as of 1st August visitors arriving in Jamaica from outside of the region will be required to a $20 tax. Similarly, the Airport Administration Charge Act 2012 was recently passed in Antigua with an increase from $63.75 to $93.75 added to the flight cost for passengers heading to their Antigua holidays. Additionally, as of 1st September Jamaica hotels will be forced to charge an accommodation tax of $1 per night for hotels with fewer than 51 rooms, $2 per night for hotels with 51-100 rooms and guests staying at properties with more than 100 rooms will incur a $4 per night fee.

 Antigua and Barbuda
Image by: IDEE_PER_VIAGGIARE,on Flickr

A major source of contention for the Caribbean region remains that the current system, calculated according to the distance between the UK capital and the capital city of the destination, is inherently biased towards the United States. The end result is higher taxes for Caribbean holidays than for holidays to US destinations located west of the East Coast cities, despite the fact that they are further away. As a result travellers may be put off from booking their holidays in Jamaica in favour of destinations like Hawaii as a result of the higher APD for flights to Jamaica.

 Caribbean Beaches
Image by: worldtraveller,on Flickr

Following the recent 2012 Caribbean Tourism Summit, officials across the region now appear to be in agreement that a more aggressive co-ordinated approach is necessary, with Trinidad and Tobago’s Minister of Tourism Dr Rupert Griffith expressing willingness to approach his Cabinet for the funds necessary to lobby in the UK to reverse the APD as he noted his own concerns over the impact the APD is having on the number of travellers booking Tobago holidays from the UK.

Dr Griffith’s statements will certainly come as good news to the president and CEO of the World Travel and Tourism Council (WTTC) David Scowsill who recently stated, “Now we will have to go to war…This APD is a disease that will spread to other countries unless we stop it now. We have to find a different way to persuade the UK government on its view on the APD and this is going to require money, funds for the lobby organisations and one voice rather than independent voices that are shouting about the issue around the world”.

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