CHTA Supports CARICOM Chairman’s Views on U.K. Air Passenger Tax

The Caribbean Hotel & Tourism Association (CHTA) recently announced that it fully supports the recent actions of CARICOM Chairman Hon. Dr. Kenny Anthony, prime minister of St. Lucia, who has written to British Chancellor of Exchequer, George Osborne, about the detrimental effects the United Kingdom's Air Passenger Duty (APD) has on the entire Caribbean.

In his letter, Anthony wrote, "The Caribbean understands the fiscal challenge faced by the UK in respect of raising revenue, but we do not believe that APD should be imposed unfairly, or at the expense of the Caribbean economy and our community in the UK. Our data shows the negative effect that APD is having in this respect and how its hampered our ability to obtain the greatest benefit from our most valuable export industry. It also has a significant financial impact on the UK companies, large and small, with which we partner and for whom the Caribbean has been a major market."

Richard J. Doumeng, president of CHTA, commented, "The CHTA welcomes the news that Prime Minister Anthony has written to the British Chancellor about the negative impact of APD on the Caribbean. The fact that the Prime Minister, who is also the Chairman of the Caribbean Community, has written to the UK government on this issue demonstrates the seriousness with which the Caribbean region takes this issue and the severe impact that the duty is having on the Caribbean."

Doumeng added, "APD is a significant threat to the sustainability and growth of Caribbean tourism. CHTA, along with its partners in the Caribbean Tourism Organization (CTO), has consistently campaigned against APD on behalf of its members and all of those who depend on tourism. CHTA passed a resolution in January 2012 calling on Caribbean governments to engage with the UK treasury on this issue and we are delighted that this is now happening. We stand ready to provide support to Caribbean governments as they seek to have the Caribbean's concerns addressed."

At its January 2012 Board of Directors meeting, the CHTA Board passed a resolution requesting that "in view of the proven and ongoing negative economic impact on the UK visitor arrivals to the Caribbean, the second largest originating visitor market to the Caribbean, that the Governments of the Caribbean initiate with immediate effect all necessary steps to have the APD banding issue addressed with the UK Government at the highest level making clear that APD is damaging the Caribbean tourism economy and the once positive relationship between the UK and the region."

CHTA's Board of Directors' resolution further called on the governments of the Caribbean "to make clear that the UK APD banding structure contravenes the spirit of the EU CARIFORUM Economic Partnership Agreement, to which the UK as an EU member is a signatory. It additionally called on Governments to review alternative options to address the issue including the bringing of a complaint at the World Trade Organization (WTO) under the General Agreement on Trade in Services (GATS) based on the discriminatory nature of the APD banding system against the Caribbean, and other inequities contained within the UK's APD system that may exist."

The World Travel and Tourism Council (WTTC) published a report in May 2012 confirming the significant value of travel and tourism to jobs and growth in the UK and the damaging effect of Air Passenger Duty to the industry.

According to reports by the Caribbean Tourism Organization (CTO), the UK visitor market to the Caribbean in 2007 was at 1,373, 600 and in 2010 had declined to 1,103,400, a decrease of 270,200 visitors representing a major economic loss.

Citing the case of St. Lucia, Anthony said, "Visitor arrivals from the UK declined every year for the past three years. In 2010, tourist arrivals fell 19.4 percent below the 2008 level and in 2011 registered 14.4 percent less compared to 2008."

Anthony added, "This decline in arrivals is exacerbated by a further reduction in on-island expenditure as the tax has had a negative impact on a traveler's budget, resulting in reduced economic benefit to the country. Indications are that tourism receipts associated with these declining numbers in the last three years have fallen on average more than 25 percent below the 2008 level."

Since 2008, the Caribbean and its community in the UK have consistently sought to raise the issue of APD at all levels of the British government and with the UK Parliament making clear that the Caribbean requires parity in banding with the US and that APD is a political issue for the Caribbean and the Caribbean Diaspora in the UK.