CTO chairman believes a re-examination could help to boost tourist arrivals to region
A top regional tourism official is suggesting that Barbados and other Caribbean destinations look at restructuring airport taxes as one way of encouraging a full return of airlift to the region and an increase in intra-regional travel.
This idea was put forward by Chairman of the Caribbean Tourism Organisation (CTO) Kenneth Bryan, who said he was hoping to put the suggestion on the table when he meets with CTO member state representatives in the coming months.
Though acknowledging that the removal of taxes could be difficult for some countries at this time since destinations were still recovering and the reduction in airlift capacity was affecting them differently, Bryan said destination leaders still needed to ask themselves what they were willing to sacrifice.
“These taxes that have been [making] it difficult to even break-even need to be re-examined and it is upon us all if we want to collectively find a solution,” he said.
“It is going to be some negotiations, it is going to be some re-prioritising and the question is whether we as a region are willing to make the sacrifices for the greater good [because] we will make that income on the backend when visitors come back. I truly believe the reason we don’t have the numbers we should have is because of the major effect of connectivity,” said Bryan.
He was responding to questions from reporters on Tuesday during a media briefing on the performance of Caribbean tourism and the outlook at the CTO’s Warrens, St Michael office, where officials reported that the industry continued to recover and could surpass 2019 arrivals this year.
At the same time, officials reported that connectivity between countries continued to be hampered by insufficient airlift.
Bryan disclosed that the Caribbean Development Bank (CDB) was still in the process of carrying out a review of air transport in the region. Part of that review was also to look at possible initiatives to offer companies to start flying again and particularly to bring back LIAT.
“That review I am waiting keenly on. I have spoken to the President [Gene] Leon from the bank. They are working with me as a minister in the Cayman Islands as to what our national airline can do to facilitate. There are a number of reviews and discussions happening and I am hoping that their involvement can offer up some solutions,” he added.
Noting that regional destinations should not expect airlines to come “just for the benefit of the Caribbean people and run into the ground or lose profit”, Bryan insisted, “We within [the] membership have to sit down and talk to our own leaders to say what we are willing to sacrifice in order to engage and attract back airlines that are doing this for a profit.
“The COVID situation forced them to re-evaluate their circumstances and their profitability and with the shortage of the pilots, the cost of fuel, all of those factors have caused them to say ‘okay, maybe [we are] not ready yet, as well as we recognised that 35 per cent of the routes haven’t come back,” said Bryan.
Stating that regional destinations did not have the luxury of waiting on airlines to decide if they will return or if a new airline will start to support intra-regional travel, Bryan said “We have to incentivise and give options available to them to say ‘can we make it a little bit less expensive’, and that means that all the Caribbean islands may have to take a look at their own airport tax structure.
“If you just look across each Caribbean island, the variety and different levels of taxes that are imposed on airlines is a key factor to the level of profits available to any independent company,” said Bryan, who is the Minister of Tourism and Transport in the Cayman Islands.
“A cash reduction would be no different from a revenue guarantee. It is the same concept. I use the example of what we do back home – we subsidise our airlines. We don’t make a profit, but we recognise the benefit on the back-end when the tourists come and spend money in our economy. They give people jobs and we receive taxes from them on other things that they do – and I think that formula is something that many of our members have to rethink,” he explained.
“So the priority on addressing issues within the various member states is one that all members have to re-examine, and my intention at the next meeting is to bring them all back to the table to say ‘okay, what can you sacrifice, what can we offer the industry as an incentive, as a way of rebate per se to get back into the industry to offer more routes?’ So that is where we are in that space,” he said.
(MM)
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