Barbados to slash airport taxes for regional travellers by 50%

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Barbados to slash airport taxes for regional travellers by 50%

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Barbados to slash airport taxes for regional travellers by 50%
-- B'dos government encouraging intra-regional travel
Katrina King
20 July, 2021

In a bid to invigorate the country's tourism sector, the Government of Barbados has announced that they will be slashing airport taxes for regional travellers by 50 per cent.

Minister of Tourism and International Transport, Senator Lisa Cummins made the announcement this morning during a meeting with tourism stakeholders at the Hilton Barbados. She indicated that the decision by Cabinet replicates that of regional neighbour, Antigua and Barbuda, who have also sought to encourage intra-regional tourism.

"Cabinet has agreed that there is to be a 50 per cent reduction in airport service charge for regional travellers. That brings us in line to what you have been hearing coming out of other markets. Particularly, one market that has already announced it is Antigua, where there is a 50 per cent reduction. Barbados, at the level of Cabinet, has also agreed to that significant reduction," stated the Minister of Tourism.

Cummins also revealed a slew of initiatives, which aim to boost Barbados' tourism product.
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Barbados to cut airport taxes by 50%
Tuesday, July 20, 2021

BRIDGETOWN, Barbados (CMC)

Barbados Tuesday announced that it would be cutting by 50 per cent, airport taxes for regional travellers, a request that had originally been made by Antigua and Barbuda’s Prime Minister Gaston Browne as a means of encouraging intra-regional travel.

“Cabinet has agreed that there is to be a 50 per cent reduction in airport service charge to regional travellers. That brings us pretty much in line with what you have been hearing coming out of other markets, and in particular, Antigua . . . that is meant to reduce the taxes on inter-regional travel,” said Tourism and International Transport Lisa Cummins.

Cummins, responding to questions from the media, during the state of the tourism industry update, said the Cabinet had also agreed “to that significant reduction.

“That is meant to reduce the taxes on intra-regional travel,” she said, adding that Cabinet later this month will also be discussing a “full price based competitor’s analysis for Barbados”.

She said that the analysis would look at a “comprehensive review of the industry”.

“I have to confess that I always say to people I came from the… public sector…my specialisation is in international trade, I came from the international community and the private sector, so I tend to try to bring all of those things combined into one and so what we have started to do is to look at the tourism sector as comprehensively as we can structurally as well as our price competiveness…”

Cummins said that the first draft of the paper had been sent back for some further additions.

“So we are looking at what is the price sensitivity of the Barbados tourism product relative to our competitors. So that includes a range of analysis. How many flights are coming into the region by country and to Barbados per day, where are they coming from, what is the cost of those flights, what taxes are applied in each country, what are the public health measures which are new…and ultimately how does that create competitive or uncompetitive position for Barbados and on that basis what recommendations need to be made to the changes of our structure as a destination.

“So that will be coming up shortly and that analysis is underway,” Cummins added.

Earlier this month, as he addressed the opening ceremony of Caribbean Community (CARICOM) summit, Prime Minister Browne said increased movement of people within the Caribbean would be a major boost to regional economies in seeking to rebound.

“To assist in this regard, we need to immediately establish common or harmonized regional health protocols for travel (‘travel bubble’) that are clear to the public and communicated widely. The discriminatory practice of banning travel from member states with elevated levels of COVID, while accommodating guests from countries of greater risks should be discouraged.

“It is not an exaggeration to say that air transport is the oxygen that keeps tourism alive and functioning in our region. We need to care for it and provide the inputs and the enabling economic environment that will allow air transportation to grow our tourism sector back to good health,” said Browne, who is now the CARICOM chairman.

Last month, Antigua and Barbuda announced a 50 per cent reduction in taxes on airline tickets for travel within several CARICOM countries with St John’s indicating also that the measure will last for six months in the first instance.

“We think at this time where regional travel is relatively low, extremely flat that there is very little to lose and even though it may not be the best condition which to analyse the elasticity of ticket prices, it will give us some indicative indication as to how a reduction in pricing would impact on demand without creating a financial crisis,” Prime Minister Browne said.
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Cummins: Reduction of airport service charge in regional destinations
July 20, 2021

Following is a statement from Minister of Tourism and International Transport, Senator Lisa Cummins, on the reduction of the Airport Service Charge in regional destinations.

“The 2018 amendment to the Act regarding the increase of service charge fees created two categories of fees: ‘CARICOM States’ and ‘regional destinations’.

The Grantley Adams International Airport (GAIA) Inc. subsequently received complaints from several regional airlines that the tax was having a negative impact on intra-regional travel.

The request was made that the BDS $70 fee charged to passengers travelling to CARICOM states be extended to passengers travelling to other regional states.

The Cabinet approved this amendment.

Therefore, when the legislative process has been completed, all ex-CARICOM regional airlines’ passengers will pay the same service charge of BDS $70 as opposed to the BDS $140 that they are currently charged.

The additional countries that will benefit when the new legislation comes into being will be:

a) the islands of the French Antilles;
b) the islands of the Dutch Antilles;
c) the islands of the British Antilles;
d) the islands of Puerto Rico and the US Virgin Islands;
e) the Dominican Republic; and
f) Cuba.

“It is considered that this will be of significant benefit to intra-regional travel.

The airport service charge on all international travel remains at the level of BDS $140 or US$70.”
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[Barbados, Editorial] Low travel taxes, big opportunity
July 21, 2021

Hot on the heels of last weekend’s introduction of a travel bubble that will benefit more than a dozen regional countries, Government on Tuesday announced a move that should entice more Caribbean people to start flying again.

Barbados will be going the same route as its Caribbean neighbour, Antigua and Barbuda, in slashing airport taxes for regional travellers by 50 per cent.

Minister of Tourism and International Transport Senator Lisa Cummins made the disclosure during the State of the Tourism Industry update at the Barbados Hilton, and later provided more details of the service charge adjustment in a statement.

The airport service charge is currently set at BDS$70 for travellers to CARICOM states and BDS$140 for travellers to other regional destinations, as well as international travel.

“The request was made that the BDS$70 fee charged to passengers travelling to CARICOM states be extended to passengers travelling to other regional states. The Cabinet approved this amendment. Therefore, when the legislative process has been completed, all ex-CARICOM regional airlines’ passengers will pay the same service charge of BDS$70 as opposed to the BDS $140 that they are currently charged,” Minister Cummins explained.

Travellers to Cuba, the Dominican Republic, and the islands of the French Antilles, Dutch Antilles, British Antilles, US Virgin Islands, and Puerto Rico will benefit from this change.

The move to reduce the taxes comes a year after Prime Minister Mia Mottley signalled her Government was prepared to make the move.

Last month, the Gaston Browne administration in St John’s led the way, halving taxes on airline tickets for six months in the first instance.

For the region’s people, it has been a long time coming.

This business of high travel taxes has been a bugbear for nationals who island-hop to holiday with friends and family, businessmen in search of new markets and investment, consultants offering services, as well as artistes, artisans, sportsmen and sportswomen sharing their skills.

Most vexing, in some cases, was that taxes on an airline ticket to a country in a region that relies so heavily on tourism could account for as much as 60 cents in every dollar, forcing Caribbean people to adjust to the cold reality that it was cheaper to travel to the United States than a few hundred miles away.

Some lobbied for a better deal, like the group called the ‘Caribbean Citizens Against High Intra-Regional Travel Taxes’ that started a petition for a tax reduction that gathered nearly 20 000 signatures; however, there was little change as governments appeared reluctant to part ways with the revenue.

But in an ironic twist, COVID-19 and its crippling impact on travel forced authorities to change course in a bid to revive the major foreign exchange earner that has been struggling to find its footing.

It’s unfortunate that it took a dire state of affairs to lower taxes, but there’s no use in dwelling on the past.

We agree on this occasion with recent statements of the Antiguan leader that the Caribbean has nothing to lose by the move.

Prime Minister Browne has suggested: “We think at this time where regional travel is relatively low, extremely flat, that there is very little to lose, and even though it may not be the best condition to analyze the elasticity of ticket prices, it will give us some indication as to how a reduction in pricing would impact on demand without creating a financial crisis.”

Caribbean people have been longing for a service that is convenient, reliable and affordable.

While we expect it will take some time to lure travellers in the current climate and rebuild what was once a lucrative market for Barbados, the opportunity should not be missed.

With the current travel bubble in place that allows for fully vaccinated travellers from Grenada, Antigua and Barbuda, Dominica, Anguilla, Montserrat, Bonaire, St Eustatius and Saba, St Maarten, Turks and Caicos Islands, Cayman Islands and Bermuda, who present a valid pre-flight negative PCR test, to be exempt from further quarantine or testing upon arrival in Barbados, every effort should be made of the opportunity to entice Caribbean nationals to pay us a visit.

Additionally, we expect that this could be the jumpstart that LIAT and other regional carriers desperately need to return to viability.

We hope that more Governments will follow suit.

If there was ever a time for the region to truly work together for the economic benefit, health and safety of its people now is certainly that time.
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