Lower air fares considered key to regional tourism revival
Caribbean tourism bosses need to negotiate as a block to slash harmful “travel taxes” through “free trade” arrangements with key markets, particularly the U.S., a regional tourism expert claims.
Cheaper air fares are the key to lifting tourism across the Caribbean, former Bahamas tourism minister Vincent Vanderpool-Wallace said in a speech to the Cayman Economic Outlook conference Thursday.
Mr. Vanderpool-Wallace said targeting “jaw dropping” taxes on international travel, particularly out of the U.S., should be a regional priority. He said the taxes contribute to pricing Caribbean countries out of competition with popular U.S. destinations like Las Vegas and Orlando, even when journey distances and times are roughly similar.
He warned countries such as Cayman that they should not expect to get something for nothing and would have to consider lifting their own departure taxes in reciprocal arrangements with other countries.
“How can I… ask somebody to remove their taxes when I am raising mine?” he said.
He said similar “free trade” arrangements take place on the transport of goods all over the world. The only difference with tourism is that the goods being moved are people.
Mr. Vanderpool-Wallace said he knows of at least one Caribbean country that is in negotiations with the U.S. for both jurisdictions to drop airport departure taxes. But he said the region would carry more weight if governments coordinated to negotiate as a bloc.
“The thing that drives me crazy is that for the longest period of time, world trade has exploded because they have reduced the cost of taxes for things crossing borders,” he said.
“I am in the business of travel, and a departure tax is a tariff on travel. The one thing we have not done is focus on my business and tried to reduce the cost.”
Mr. Vanderpool-Wallace, who is principal of the Bradford Baker Group, a travel, tourism and hospitality consultancy firm, believes reducing the cost of travel from core markets is the key to reviving tourism in the Caribbean.
He said reducing taxes on travel would enable the Caribbean to fill low-fare flights from New York and Florida year-round.
He warned that not enough tourism officials in the region consider the impact of flight prices on people’s decisions to travel and are content to levy harmful taxes that keep prices high.
“Anyone who doesn’t understand [that] the cost to get to the country is part of the cost of the vacation is an idiot. They look at the average room rate, but they don’t look at the cost to get to the destination.
“You have to have low-cost, high-quality and frequent air transportation.”
He said the focus should be on the U.S. because it is the core market, but similar arrangements within the region could make inter-island travel more viable.
“If you look at the cost of travel within the Caribbean, it is the most outrageous thing you have ever seen in your life. The whole idea is let us begin by eliminating some of these tariffs between countries and I guarantee you will see an explosion in travel.
“When you get it done in the Caribbean, let’s go as a bloc and go talk to the source of our business (the U.S.) and get it done there.”
He added that national airlines, like Cayman Airways, have a role to play in keeping costs low.
He said studies show that warm weather vacations are still the most popular holiday type and that, within the U.S., the Caribbean is the No. 1 foreign destination for travelers.
“The demand and the desire is there. All we have to do is make it easier and less expensive to get here and people will come.”