CTO News

Caribbean Tourism Organization Statement on Air Passenger Duty Ahead of UK Budget

The British Chancellor George Osborne will present his budget on 19 March in a speech to the British Parliament. The Caribbean Tourism Organization (CTO) will be listening carefully to see if the Chancellor is yet prepared to recognise  the widespread concern that exists in the Caribbean and among the Caribbean community living in the UK about the damage being done and the lack of fairness in the way in which the UK’s Air Passenger Duty (APD) is applied.

The duty on flights from London to the Caribbean will increase to £85 (US$140) per person in economy from 1 April 2014 unless Mr. Osborne announces a change.  By this point, APD on flights to the Caribbean will have increased by £35 (US$58) or 70% since 2009. This compares to an increase of just £2(US$3) or 18% from London to Europe and £24(US$40) or 53% to the USA.

As CTO has pointed out over a number of years, the current structure sees duty on flights from the UK to Miami, Florida charged at lower rates than that on flights to Bridgetown, Barbados even though they are the same distance from London. Moreover, even though Hawaii is 3,000 miles further away from London, the duty on flights there is also lower than on those to the Caribbean.

Mr Osborne, who leads the British Treasury, noted the anomaly in the four band structure of APD in his 2011 budget speech, when he said: “…we are consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California.”

Despite this, and a lengthy consultation in which the Caribbean participated, no change has been made to the discriminatory aspect of the duty.

The CTO recognises that all Governments are required to raise revenue but believes that this should not be at the expense of the economies of regions like the Caribbean which are tourism dependent. Nor should it be the case that the Caribbean’s Diaspora in Britain should be penalised when for cultural reasons they return for funerals, weddings and other important family events.

The British Government’s own statistics suggest that Caribbean destinations are seeing below average arrivals from the UK.  This is reflected in the Eastern Caribbean Central Bank’s figures, which demonstrate that Eastern Caribbean nations continue to suffer reduced arrivals from the UK compared to other feeder markets such as the USA and Canada.  In some Caribbean countries up to 40% of total arrivals by air are from the UK, making any reduction in visitors economically challenging. It is not surprising therefore, that many Caribbean countries are currently suffering extreme economic challenges. Many of those are countries are highly dependent on the UK market.

The Caribbean Tourism Organization, along with Caribbean Governments, the Caribbean Hotel and Tourism Association, Diaspora groups in the UK, the World Travel & Tourism Council and partners from the British travel industry such as airlines and tour operators have since 2009 been campaigning against the steep increases in APD.

The Caribbean therefore hopes to see on 19 March  the Chancellor introduce measures that address its concerns.

Posted in: 2014 News, APD, Blog

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