In what must be a first for any country in the world, and the clearest indication yet of how much Air Passenger Duty (APD) is hurting those Caribbean nations that depend heavily on arrivals from Britain, Barbados is to introduce a scheme to rebate back, in voucher form, the APD paid by visitors.
A short while ago, the Barbados government announced a string of initiatives to revive its tourism industry in an attempt to stimulate its struggling economy and earn more foreign exchange.
In doing so its Minister of Tourism and International Transport, Richard Sealy, and its Minister of Finance, Chris Sinckler, introduced a 10 point Tourism and Hospitality plan that is intended to encourage partnerships to build new hotels and reopen properties that have closed, plus offer a range of other initiatives extending tax incentives to hoteliers to improve energy and water efficiency. They also announced plans for the creation of a marketing strategy intended to differentiate the brand Barbados by promoting the island as a sustainable, green and clean energy destination.
But unusually, in what is the first move of its kind in the Caribbean region or elsewhere in the world, the two ministers also announced an initiative which will partner Government and the tourism and hospitality sector, to grant credit vouchers up to a specified amount in Barbados Dollars, equivalent to the APD paid by British tourists who book a holiday on the island for at least two weeks with participating hotels.
Speaking subsequently, the Island’s Tourism Minister indicated that that it was one of several voucher ideas that he hoped would create immediate results. It responded, he said, to local hoteliers’ concerns that APD was having a negative impact on arrivals from the UK and on the amount visitors spent on the island.
Although it is not yet known how the scheme will operate, it has been welcomed by the Barbados Hotels and Tourism Association and could have a significant impact, as in April of this year the tax rose to £83 per person on an economy-class flight from the UK to the Caribbean and is higher on other classes of travel.
For Barbados and the Eastern Caribbean islands in particular, the UK remains their main tourism source market, with in Barbados’ case UK arrivals down by nearly 10 per cent in 2012.
Meanwhile it has become apparent that the British Treasury has no plans to review the tax unless UK government ministers or the opposition parties see an opportunity for political advantage in changing their position before or during the electoral campaign in the run up to the next general election, expected in May 2015.
What this points to in the coming months is that the actions most likely to be effective in changing UK thinking on APD and the Caribbean, will most likely not come from representations by Caribbean governments, but rather from the direct lobbying of MPs and political parties by members of Britain’s Caribbean community, especially if they live in parliamentary seats that might change hands.
Moreover what is clear is that this is also the time when members of the Caribbean Diaspora who belong to the UK’s Labour Party must argue for the party to include in its manifesto commitments to the Britain’s Caribbean community, a commitment to review APD banding in relation to the Caribbean.