Island hopping

The Caribbean is struggling to boost inter-regional travel.

Air travel between the islands of the Caribbean has for decades been prohibitively expensive. It can often be cheaper to fly from London to Kingston than from Jamaica to Trinidad. There is demand certainly but routes are too often dominated by one or two carriers that charge extortionate prices.

Indeed, according to the Caribbean Hotel and Tourism Association, intra-regional business and leisure travel plunged to around 30% last year. Smaller Caribbean economies and businesses were hit particularly badly.

A regional adviser on tourism matter to Caribbean governments explained, “The cost of air travel between major cities in the region is having an adverse economic affect – both in terms of inter-regional tourism and trade. No island has sufficient demand to allow for point-to-point service. Reducing air travel taxes is one possible solution but difficult to implement because the perception will be that international visitors are being unfairly taxed whilst residents of those countries will pay less.”

“The cost of air travel between major cities in the region is having an adverse economic affect – both in terms of inter-regional tourism and trade.”

Regional adviser on tourism to various Caribbean governments

Heavyweight industry bodies – influential across the region’s air travel industry – have made positive steps. Hugh Riley, Secretary General of the Caribbean Tourism Organisation has urged regional authorities to institute an ‘Open Skies’ policy and wherever possible eliminate secondary screening at Caribbean airports.

Reducing air travel taxes sounds good on paper but there are several implications to consider. For example, for regional administration heavily reliant on tourism revenue, they will be hesitant to introduce any measure that significantly decreases departure tax which represents a substantial fiscal stream.

Indeed, where administrations have to pay for airports – and several regional governments still have debt on airports – part of the agreement when they received funding was that they were going to take increase air travel taxes to a certain level in order to pay for the new infrastructure. This makes it difficult for administrations to renege on such deals in order to implement new policies designed to expedite travel.

Pundits don’t currently believe that there’s consensus on it as a policy because governments are at varying stages of debt related to airport development; administrations are unlikely to arbitrarily give huge concession on taxes because it is going create significant problems, they are going to have to find that money from somewhere else.

A regional tourism entrepreneur explained, “The private sector in Trinidad and Tobago supports reducing air travel taxes, this is because there’s far more revenue to be gained because of challenges to go to the US, get US currency etc. The region could encourage inter-island travel for shopping, medical tourism and so on if flights are priced reasonably. The very tourism dependent islands would be the ones that would push this type of thinking.”

“The region could encourage inter-island travel for shopping, medical tourism and so on if flights are priced reasonably.”

Regional tourism entrepreneur, the Caribbean

Recent data suggests that reforming air travel tax could see intra-regional travel increase by about 25% between the islands. A lot of destinations are already getting better arrival rates, that’s a positive sign probably between 15 to 20% – countries will see higher taxation and higher spend in the islands.

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