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Britain ‘s Air Passenger Duty tax: A disaster for the Caribbean

Britannia may no longer rule the waves but its imposition of the November 1 Air Passenger Duty (APD) tax has sent shock waves across the Atlantic that will wash up on Caribbean shores with a devastating effect on the Caribbean tourism industry.

In spite of massive lobbying from home and abroad and objections from airlines, tour operators and tourism organizations including the Caribbean Tourism Organization (CTO), the British government went ahead with its plan to impose the allegedly "green" and controversial Airport Passenger Duty (APD) aimed at taxing aviation's "carbon emissions."

CTO secretary general Hugh Riley called the air passenger tax " illogical and one that will damage tourism to the Caribbean."

Meanwhile, British Airways, which is greatly increasing service to the region this winter, has denounced what it calls "these huge tax hikes," warning "it was bad news for holiday makers and completely unjustified."

It is a sentiment that the Association of British Travel Agents (ABTA), which launched a petition on its website, agrees with. ABTA spokesman Sean Tipton in a BBC Radio interview said, " It’s impact would be felt in Britain, the Caribbean and elsewhere."

And Brian Deeson CEO of the Pacific Asia Travel Association (PATA), has said the UK government's decision to raise taxes from British airports is "shortsighted and self-defeating."

Virgin Atlantic also voiced its opposition to the tax, predicting that the increases will hurt the aviation industry, the British economy, the Caribbean and other developing countries.

To add a historical perspective to this universally despised tax, one has to go back to 1994 when the UK government originally introduced the APD which comprised a flat rate on all passengers departing from British Airports at varying levels depending on the class of travel.

In November 2008, however, the government made known that it planned in the context of its annual budget, a number of significant changes by introducing a four-tier distant related system.

As of November this year, APD charges are being divided into four "bands." A, representing journeys of up to 2000 miles; B, representing flights 2000-4001 miles; C, covering trips between 4001-6000 mile; and band D, for all journeys more than 6000 miles.

With effect from November 2009 the APD payable by a visitor to the Caribbean traveling in economy class will increase by 25 percent. From November 2010, the increase will be no less than 87 percent. And for passengers traveling in Premium Economy and Business Class, the corresponding increases will be 25 percent and 94 percent respectively.

According to Mr. Hugh Riley, "These are wholly unacceptable increases at a time when our economies are struggling to maintain demand. In practical terms this means that a family of four traveling in Economy Class to a Caribbean destination, will be required to pay 300 pounds in APD alone and in Premium Economy, 600 pounds!"

Under the banding system, the amount of duty levied is related to the distance between London and the destination's capital city. This measure has the disturbing effect of discriminating in favor of the United States over the Caribbean "for reasons of administrative ease."

It does so by determining that all of the US (although oddly enough not the US Virgin Islands or Puerto Rico which are considered Caribbean) is closer to London than all of the Caribbean.

Under this impaired British logic, it is implied that the damage to the environment caused by flights to the Caribbean is more than that generated by flights to California or Hawaii. The Caribbean is banded along with the US despite being 3,000 miles further away than for example St. Kitts and Nevis, in the Eastern Caribbean.

ABTA's Head of Development, Andy Cooper said, "It's no coincidence that the United States, the country most likely to challenge these taxes appears to have benefited mostly from these new arrangements."

The ABTA official added, "Many customers will simply not be able to afford the new rates of tax and will have to change their booking patterns causing huge damage to economies which are dependent on British tourists."

Mr. Cooper called on the British government to reconsider the changes to APD or to scrap the tax altogether something that the Dutch government did in July of this year.

According to Caribbean tourism experts and government officials, the impact of the increased Air Passenger Duty on UK visitors to the Caribbean is expected to be immediate and will have a negative effect on the economies of Caribbean countries. Last year, the region received over one million British visitors or just 6 percent of total arrivals.

Many of the Caribbean destinations are highly dependent on tourists from the UK even through this economic downturn. For example, 39 percent of tourist arrivals to Barbados are from the UK, while Antigua and Grenada attract 34 and 28 percent respectively.

CTO's boss, Hugh Riley, is in total agreement that "these changes in the APD will have a major detrimental effect on tourism to the Caribbean and disproportionately affect the large Caribbean Diaspora in the United Kingdom, at a time when the projections of the CTO suggest a sharp fall in visitor arrivals for the remainder of 2009 and in 2010."

Led by the CTO, the Caribbean that stands to suffer the most from these new changes has not stood idly by but has joined many of their allies in the travel industry and the strident voices of the Caribbean Diaspora in opposing the new APD changes.

In a release to the media, Mr. Riley summarized some of the measures undertaken by the CTO. In it he stated that his organization contracted the services of the Caribbean Council to lead the Caribbean's effort to fight against the increased APD, organised Diaspora Leaders in a letter writing campaign to British MPs, published articles and conducted numerous interviews with the British media, made presentations and submitted data to the Caribbean Diplomatic Corps in London, galvanized Caribbean Leaders including the Prime Ministers of Jamaica and Barbados to visit London to direct representations against the tax hike, and conducted research on the likely effects on the increased APD on Caribbean tourism.

However, in spite of the near universal condemnation of the APD, the British government has stood firm. In a meeting with British Parliamentarians on the penultimate day of this years' World Travel Market Caribbean Ministers of Tourism were emphatically told that the measures would stay in place.

The clear message from the Gordon Brown-led British government is that the Caribbean must find a way coping with the hike and the British Treasury says it needs all the money it can get and wont repeal the measure.

But St Lucia Tourism Minister Alan Chastanet said in a BBC Radio interview that he will be in the forefront of efforts to fight "the illegal tax increase." Mr. Chastanet has also hinted that a legal challenge is one of the options being looked at in conjunction with other concerned States.

One thing is now certain: the issue of the APD and the Caribbean is far from over.

World travel trends spell opportunity for 2010

The World Travel Trends Report 2009, published last week at the annual World Travel Market exhibition in London by market research group Euromonitor, spells out intriguing lessons from the 2008/9 slump in global tourism and the opportunities for the upcoming travel season.

"2009 was a challenging year," said Caroline Bremner, global travel manager at Euromonitor, "We predict that 2010 will be much better.” In particular, the following trends spell opportunity for global destinations going into the World Cup Year.

Over-60 market ignores economic crisis for travel

The report revealed that the Grey Market (travellers over 60 years) refuse to let the recession kill their holidays. The Grey Market makes up nearly two thirds of the 54% of people who have declared their holidays sacrosanct and decided to ignore completely the economic downturn. "Eighty percent of the public sampled admit issues such as poor currency exchange rates and flight taxes won't deter them. And of those people, the over-60s is the biggest grouping (84%)," said Fiona Jeffery, chair of the World Travel Market.

Obama factor boosts tourism to Africa

As for Africa, the Global Trends Report 2009 reveals that tourism to the continent is experiencing a revival largely thanks to US President Barack Obama. The election of a President with an African heritage has encouraged many Afro-Americans to not only trace their roots but also visit the lands of their ancestors.

The US represents Africa's largest source market with 41 million African-Americans in residence. Of the total, 31% make up Generation Y (people born in the ‘80s and early ‘90s) presenting a strong opportunity for tourism to the region to continue to grow in the long-term.

Furthermore, DNA testing to trace ancestral origin has increased in popularity and is boosting cultural and heritage tourism to the region. There are now more than 2000 genealogy companies in the US and 35 000 African Americans have done DNA tests since 2002.

Golf tourism in Asia on the rise

The rising standard of living across many Asian countries combined with the desire of emerging destinations such as Laos, Cambodia and Vietnam, to develop tourism infrastructure through high-value, high-spending visitors is fuelling the golf tourism trend. Current leaders Thailand enjoyed revenue from golf tourism totalling US$800 million, growing at 10% per year, putting the niche sector in a much better position than the overall tourism sector.

Many tour operators have devised value-add packages offering unlimited rounds at a discounted price to attract golfers from Japan, South Korea and Singapore. The Southeast Asian Golf Trail combines top-class courses across Thailand, Vietnam and Cambodia for a value-for-money price.

Women-only hotels growing across Middle East

The growing young and female population in the Middle East is encouraging suppliers to target this market with culturally acceptable and tailored concepts. Saudi Arabia is leading the way with the first women-only hotel, Luthan Hotel & Spa.

Egypt and Iran are also key target markets for female-only concepts, especially with women accounting for almost half of the total population in 2008. In destinations such as these, where cultures are conservative, women-only concepts are likely to appeal to Middle-Eastern Women and Westerners, who want the additional reassurance.

“Pop up Hotels” sprouting up in the UK

Whilst the local hotel industry was recently wringing their hands at the 2009 Hospitality Investment Conference, estimating the current over-supply in hotel rooms at 25% (and growing), a new concept hailing from the UK, called "pop up hotels", provides hotel operators with greater cost efficiencies because the hotels are temporary structures which can be constructed at short notice to meet demand almost as you go.

A number of UK companies are spearheading the use of pop-up hotels. Travelodge opened its first one in Uxbridge, west London last year. The budget chain plans to open 40 hotels a year between now and 2020, half of which will be pop-up builds.

Said Fiona Jeffery: “Pop-up hotels are a great concept. In such uncertain financial times, managing the overheads of a fixed place hotel can be difficult … Pop-up hotels only have to fill the bedrooms for a set period of time. The buzz created by a pop-up hotels leads to positive PR and word-of-mouth marketing.”

The implications for 2010 are clear: No longer is the shotgun approach to destination marketing sufficient, the traditional waxing lyrically about one's own beaches, sunshine and scenery, but the new travelling class of 2009 demands unique value propositions that are geared towards meeting their very own needs; and many times, what travellers really want, are meaningful activities that enhance their quality of life.

By:: Dr Nikolaus Eberl

World Tourism Day 2009: "Tourism – Celebrating Diversity"

World Tourism Day, celebrated annually on September 27, will be taking place this year in Accra, Ghana. As part of the official celebrations, UNWTO will collaborate with the host country to organize a Think Tank around the 2009 theme “Tourism: Celebrating Diversity."

This will be World Tourism Day’s 30th anniversary and presents an opportunity to highlight the wealth of cultural and natural diversity across the globe, as well as the role of sustainable tourism in preserving this diversity. Diversity has long been the driving force behind tourism which in turn has become an engine for socio-economic development, poverty alleviation, and international understanding. As world leaders come together to tackle the challenges of climate change and the economic crisis, diversity will continue to drive tourism, engendering international cooperation, and ensuring sustainable development.

Following the successful experience of previous World Tourism Day celebrations, UNWTO is organizing with the host, Ghana, a Think Tank based on the World Tourism Day Theme: “Tourism: Celebrating Diversity." Bringing together leading public and private tourism stakeholders, as well as members of the media and UNWTO representatives, the Think Tank promises to be instrumental in raising awareness of the significance of diversity and sustainable tourism.

The Think Tank will:

• Highlight tourism’s capacity to maintain diversity in the face of globalization

• Outline how tourism can enhance cultural and environmental diversity

• Consider the role of tourism in engendering international cooperation

The main purpose of World Tourism Day is to foster awareness among the international community of the importance of tourism and its social, cultural, political, and economic values.

Assistant Secretary-General & Spokesperson: Geoffrey Lipman Media Officer: Marcelo Risi T: +34 91-567-8178 / +34 91-567-8100 F: +34 91-567-8218 Email: comm@UNWTO.org Web: www.UNWTO.org

St. Maarten Prepares for its 8th Annual Regional Tradeshow SMART 2009

The travel industry of St. Maarten - St. Martin will be receiving international travel partners and wholesale travel agents for the staging and offer of the island's general hotel and tourism services.

Philipsburg, St. Maarten (PRWEB) May 18, 2009 -- The St. Maarten Tourist Bureau, L'Office du Tourisme de St. Martin, St. Maarten Hospitality & Trade Association and L'Association des Hoteliers de St. Martin presents its 2009 St. Maarten - St. Martin Annual Regional Tradeshow (SMART).

St. Maarten SMART 2009

The 8th SMART edition will take place from Wednesday May 20th through Friday May 22nd, 2009 at the Radisson St. Martin Resort Marina & Spa. The SMART conference has become the first congress to showcase the hotels and general tourism services of the Northeastern Caribbean Region which include Anguilla, Antigua, Barbuda, British Virgin Islands, Dominica, Guadeloupe, Montserrat, Saba, St. Barthelemy, St. Eustatius, St. Kitts & Nevis, Barbados and St. Maarten - St. Martin.

The SMART 2009 conference offers the perfect setting and business atmosphere for international buyers to meet one-on-one with suppliers of the Northeastern Caribbean Region's tourism industry. Over 50 supplier companies will be presenting their product to more than 30 buyers.

Suppliers and buyers will have this exclusive opportunity to go over business opportunities with decision making representatives all in one place. Starting from day one at the welcome reception, travel representatives will have the opportunity to socialize and talk business within a more relaxed environment.

The schedule for the 8th SMART conference is as follows:

May 20, 2009
Official Arrival Day for Buyers & Suppliers
2:00pm - 6:00pm............ Registration & Credentials Claiming
4:00pm - 6:00pm............ Supplier Tabletop Setup
7:30pm............................ Welcome Reception

May 21, 2009
7:30am - 9:30am............ Registration & Credentials Claiming
8:45am - 9:45am............ Buyer to Supplier Scheduling Session
10:00am - 5:30pm.......... Pre-Scheduled Appointments
12:30pm - 2:30pm..........A "Working Lunch" is provided
7:30pm...........................Farewell Party

May 22, 2009
9:00am - 12:00pm.......... Additional Optional Appointments
9:00am - 12:00pm.......... Small Hotels Sales & Marketing Training
9:00am - 4:30pm............ Hotel Visits, Island Tours

Jamaican Tourism under pressure

if there were still some uncertainty about the impact of the global crisis on the Jamaican economy, figures posted last week by the Jama ica Tourist Board (JTB) on visitor arrivals for March and the first quarter of the year leave no doubt that the tourist industry is hurting.

The drop in arrivals in March reverses increases in January and February and diminishes the hope that the island would return to a growth path after three consecutive months of declines from October to December 2008. It also resulted in a growth rate of only 0.6 per cent for the financial year 2008-09 as against an original target of 13.5 per cent. When account is taken of the new rooms opened during the period, this meagre growth means that sections of the industry experienced significantly lower occupancy levels.

The double-digit decline in US tourists in March, even after normalising for Easter traffic and other special circumstances in this month last year, suggests that the move by American consumers to cut spending on vacations has taken effect. In fact, this was the fifth straight monthly decline since the downturn in US visitor arrivals began in July 2008. With recent economic data showing that US consumer spending fell for the second consecutive month in April, we should anticipate further slippage in arrivals of American tourists in the months ahead.

Leading indicator

Such an outcome should not be surprising, since the unemployment rate, which is a leading indicator of consumer spending, is expected to continue a steep climb into 2010. Moreover, the pressure on consumers in a tight economy to save more means that they will be looking for bargains and hence, heavy discounting will be necessary to attract travel bookings. Not only will the tourist industry be buffeted by declining arrivals, but its revenues are going to be squeezed.

The return of Mexico, which is planning to mount a multimillion-dollar campaign to restore its brand and bring visitors back to Cancun and other competing resort areas, is being anticipated. It is another factor that will make the marketplace more turbulent for Jamaica and other Caribbean destinations in the late summer. Hotels in Cancun have already cut rates by 50-70 per cent and are offering credit worth up to US$250 for food and other items.

According to a senior vice-president of Apple Vacations, one of the leading tour operators doing business in Jamaica, Mexico is already offering holiday packages that are 70 per cent and 50 per cent cheaper for May and June, respectively. As he says, there will be "a bonanza of good deals this summer".

In the meantime, Jamaica is benefiting from the diversion in tourist traffic from Mexico. We have, therefore, done better in April and are enjoying higher arrivals in May than were earlier anticipated. After this temporary relief, the difficult prevailing economic conditions will make it extremely challenging for the industry to achieve even the modest growth target of six per cent.

Still, there are some positive features of the tourism landscape which should provide encouragement as the industry confronts the difficulties. First, the Canadian market is sustaining its powerful momentum, recording growth of 27.7 per cent in the January - March 2009 period, after the extraordinary 23.9 per cent increase in 2008. From all indications, this market has potential for further strong growth, especially as, so far, Canada has weathered the economic sto rm

much better than its powerful neighbour and the Euro zone region.

Positive responses

Second, the over 2,000 new hotel rooms by Iberostar, Fiesta and Riu, which have recently come on stream, will continue to spur interest in the destination, particularly in a market where consumers are going to be looking keenly for value. Other new products by Palmyra Resorts and Secrets are slated to come on to the market later this year and in 2010, adding more excitement to Jamaica's tourism offerings. Also, my impression is that improvements to our infrastructure are continuing to generate positive responses in the marketplace. These are factors that should enable the island to hold its own in a period of heightened competition.

Our heavy dependence on the US, which, in spite of the recent rapid growth of the Canadian market, still provides over 60 per cent of our visitors, remains an overpowering influence on the industry's prospects. At best, it will constrain the ability of the island to expand visitor arrivals over the next 18-24 months. The tourist industry cannot, therefore, be relied upon to offset the loss in foreign-exchange earnings by the bauxite sector and the falling inflows from remittances. Very likely, the returns from the industry will go down, even if we are fortunate to contain the slippage in arrivals.

At least, employment levels should not suffer major fallout since the additional jobs being created by the new hotels should help to offset job losses at existing properties. The buoyancy of recent years may not, however, return for some time.

By; Dennis Morrison