Grenada fears increase in APD will have serious implications for regional tourism

ST GEORGE’S, Grenada, Tuesday December 10, 2013, CMC – The Grenada government says it is disappointed that Britain had not agreed to a reduction in the controversial Air Passenger Duty (APD) that Caribbean countries say puts them at a disadvantage and could destroy their vital tourism industry.

Tourism, Civil Aviation and Culture Minister Alexandra Otway-Noel said she was disappointed that British Chancellor of the Exchequer, George Osborne, in his “Autumn Statement” to Parliament last week, did not announce a reduction in the taxes at a time when tourist arrivals from the United Kingdom were on the decline.

In his address, Osborne said that the increase in the tax, which goes into effect from April 1, 2014, would increase the cost of medium and long-haul flights from Great Britain.

According to estimates, this essentially means that a family of four traveling economy to the United States will pay £276, (one British pound =US$1.63 cents) up from £268, while the APD would move from £332 to £340 if they were travelling to the Caribbean. Moreover, those opting for premium economy, business, or first-class cabins, will be required to pay double the sum.

Noting that this is the sixth time there has been an increase in the APD, Otway-Noel said she was also disappointed that the decision to follow through with the tax increases was carried out in spite of the lobbying done by Caribbean tourism officials for the British to halt the APD augmentation.

Otway-Noel was recently part of a delegation that met with the Treasury Ministry in Britain while on her recent trip to the World Travel Market. Several Ministers and Caribbean tourism officials have lobbied with the British Government over the tax that, for several years, has been on the rise.

She said that the increases would continue to have serious implications on the tourism sector.

“Persons in the Diaspora will continue to find it difficult to travel to the Caribbean to visit their family and friends. This tax is keeping families apart,” Otway-Noel said, lamenting the unfairness of the banding structure, as the taxation imposed on travel to Hawaii is less than that to the Caribbean, because of the capital city of Washington being closer than the Caribbean, for example.

“We understand that the British government has a right to tax its citizens but all the Caribbean Region is asking for is a level playing field, so that we can compete. The APD tax was originally implemented as an environmental levy and the banding structure is based on that. All we ask is that the tax be standardized,” she said.

The proposed rise of the APD will impact negatively on the Caribbean tourism industry and is a cause for concern for every Caribbean destination, as tourism is the number one income earner and employer in the region and traditionally the UK has been one of the strongest markets.

Otway-Noel said she anticipates the increase will further negatively impact the Caribbean’s current difficult economic situation and sees the need to reach into new markets to offset this unfortunate situation.

You might also like