A senior official of one of Barbados’ tourism competitors is predicting that the country will suffer some initial backlash from the travel taxes announced earlier this month by Prime Minister and Minister of Finance Mia Mottley in her $1.2 billion austerity package.
However, Joe Docal, Greater Miami Convention & Visitors Bureau’s (GMCVB) director of travel industry sales for Latin America and the Caribbean, said while the new measures will have some impact on bookings in the coming months, “people will get used to it”.
“I am not sure what that tax will be used for but it will have some impact initially until people get used to it,” Docal told the media on the sidelines of a seminar at the Hilton Barbados Resort, organized by the GMCVB, the official destination marketing organization for Greater Miami and the Beaches, whose mission is “to attract, encourage and induce all persons and organizations to visit Greater Miami and its Beaches for conventions, business and pleasure”.
“It is like everything else,” he stressed.
It was in her June 11 mini Budget that Mottley announced that tickets purchased for travel from October 1 would be subjected to a US$70 Airline Travel and Tourism Development fee for trips to extra-regional destinations and a US$35 fee for travel within the Caribbean.
Her Economic Recovery and Transformation Plan also included a hotel room tax of US$2.50 per night for B Class properties and apartments, US$5.50 for A Class and US$10 for luxury resorts, as well as a ten per cent tax on shared accommodation such as Airbnb.
Travel agencies, airlines and other industry officials today said they were yet to receive the formal guidelines for implementation of the new air travel tax, with some indicating they would have a clearer idea of its possible impact on bookings only after the tax takes effect.
The GBCVB’s representative here, Annette Manning, who is responsible for encouraging Barbadians and travellers from the Eastern Caribbean to visit Greater Miami, said Barbadian authorities should expect an initial outcry over the tax, but people would continue to find the money to travel.
“Initially, it may be a big deal. ‘Gee, US$70 multiplied by four or five members in a family’! That is always an initial thing. But like everything else it tends [not to be] in the forefront anymore because it is accepted. But as usual, any change is a big deal, and converting the US$70 equals $140 on to the ticket,” Manning said.
“The people will be a little upset about it because I myself thought, ‘wow, US$70 on my ticket?’ But like parties, when there are parties everybody goes to parties no matter the cost of the party. You don’t know where they get the money from to do what they want to do but they do it if they want to do it,” Manning said, while acknowledging that taxes on airline tickets were already high and people were already “crying out”.
A check today on a round-trip ticket from Barbados to Miami on American Airlines (AA) for travel on October 1, 2018 to return October 8, 2018, showed a total cost of $479, but did not include the US$70 Airline Travel and Tourism Development Tax, which the Prime Minister said would fund the Barbados Tourism Marketing Inc, the Barbados Tourism Product Authority, regulation of tourism and civil aviation and the counry’s shareholder responsibilities to LIAT.
The AA fare included US$89.30 in taxes for Barbados, of which US$1.50 is an airport facilitation fee, U$27.50 a passenger service charge, US$3.20 a security fee and a Value Added Tax of $57.10, as well as US$63.31 in taxes due to the United States. The fare before the taxes was US$326.
Meantime, a check on Caribbean Airlines’ website for a ticket to the same destination on the same dates revealed a ticket price of US$609.01, of which there was a flat ticket price of US$420 and taxes of US$189.01, which included US$63.31 in United States government taxes and a US$20 Trinidad and Tobago tax.
It also included US$105.70 in taxes due to the Barbados Government, made up of US$1.50 airport facilitation fee, US$27.50 passenger service charge, US$3.20 security fee, and a whopping US$73.50 “Barbados: Travel Tax”, which could be higher or lower, depending on the travel date.
International accounting firm Ernst & Young has already warned that the additional tourism taxes could reduce Barbados’ competitiveness as a tourist destination, stating in a recent analysis of the mini Budget that while the measures would generate additional revenue, they could also have the adverse effect of dampening travel as price sensitive tourists may select cheaper destinations.
And in a comment entitled, Barbados bed tax could bug, which appeared yesterday in the British trade publication, Travel Weekly, editor-in-chief Lucy Huxley described the hotel room tax as “a sure-fire way to annoy customers”, because their holiday would cost more than the price they had agreed and already paid.
“I really feel for agents with clients booked to travel to Barbados, who are now having to warn them that they are going to face a hastily implemented check-out charge from their hotels that could amount to nearly £200 for a typical 12-night stay,” Huxley wrote.
“It’s obvious that the new Government in Barbados has a huge job to do to make ends meet, and funds have to come from somewhere. But rushing through taxes that hit customers who have the choice to vote with their feet in the future could well end up not delivering the results it is hoping for,” she argued.