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Caribbean Tourism Officials Seek Concessions from Europe

Peter Richards

PORT OF SPAIN, Trinidad, Mar 14 2011 (IPS) - Caribbean officials gathered in Brussels for the region’s annual tourism summit, the first to be held in Europe, are urging their biggest development partner to draft policies supporting the lifeblood sector and ease restrictions such as Britain’s Air Passenger Duty (APD), which they say are holding back its growth.

“We want to encourage a broader awareness that the Caribbean is now the most tourism-dependent region in the world, and that our future development relies to a significant extent on tourism and its myriad economic, social and environmental linkages,” Ricky Skerrit, chair of the Barbados-based Caribbean Tourism Organisation (CTO) and the tourism minister of St. Kitts and Nevis, told European legislators Monday.

The Caribbean now has the 13th largest tourism industry globally in absolute size, and tourism is the biggest employer in the region after the public sector. It is also the largest single contributor to GDP, and in 2010 was worth an estimated 39.4 billion dollars.

Such is the importance of the industry is that while most Caribbean countries experienced a deficit in trade in goods, this was offset by a surplus in trade in services, fuelled mainly by receipts from tourism and travel-related activities.

Official figures show that during 2008-2009, for example, the deficit in trade in goods averaged 3.1 billion Euros (4.1 billion dollars). In that same period, the surplus generated from tourism and travel related activities averaged 2.5 billion Euros (2.7 billion dollars).

Skerrit said that the visit by the Caribbean delegation would also provide an opportunity to discuss how the tourism chapter in the Economic Partnership Agreement (EPA) signed between Europe and the Caribbean Forum (CARIFORUM) countries in 2008 “is to be made operational and support made available for both the public and private sector”.

“We especially want to ensure that tourism becomes deeply embedded in all future EU/Caribbean strategic planning,” he said. “We hope too that today will lead to an ongoing dialogue with multilateral and bilateral funding agencies to support tourism development finance and encourage private investment.”

“And we want to understand the current European approaches to aviation taxation, security, the environment, carbon trading and clean energy in the context of a future Caribbean tourism policy,” he said. “Perhaps this is an ambitious hope, but it is a hope that speaks to the very survival of our Caribbean economies and hope for our Caribbean people.”

It was a theme not lost on the acting secretary general of the 15-member Caribbean Community (CARICOM) bloc, Ambassador Lolita Applewhaite.

The summit provides “a unique opportunity for the Caribbean to exchange views with its most important development partner on policy issues related to Caribbean tourism, including aviation taxation, the impact of crime, the need to increase airlift, training and research, public health, foreign direct investment in the industry and CARIFORUM-EU cooperation in tourism within the context of the CARIFORUM- EU Economic Partnership Agreement,” she said.

Applewhaite noted that the sector is currently beset by a number of challenges. “Among these is aviation taxation, which we view as a tax on our development,” she told EU legislators. “Air travel represents the only realistic way for tourists to reach our region from Europe – an important long-haul market for the Caribbean.”

Europe plays a vital role as a hub in the Caribbean tourism business, she said, with airports in London, Frankfurt, Amsterdam, Madrid and Paris serving as transit points for visitors from emerging markets in Central Europe, China, India and Russia.

She said the aviation tax “has a significant negative impact on our finances, on aviation, maritime transport, on tourism and foreign relations, indeed on our entire development.”

Caribbean countries are worried that Britain, for example, which provides as much as 38 percent of visitors to some regional countries, has now imposed an Air Passenger Duty (APD) on outgoing flights.

“We view the APD as discriminatory against Caribbean destinations and Caribbean people living in the United Kingdom seeking to travel to the region,” Applewhaite said.

A report on the impact of this tax – produced by the CTO and presented to the Treasury and Department for Transport of Britain – shows that arrivals from the UK to the Caribbean are declining while those from other source markets are increasing.

It argues that by simplifying the banding system and adjusting the duty levels slightly, the APD or any successor tax could be made more environmentally apt, while projecting similar levels of revenue.

“It is clear, however, that even if the particular design problems that the Caribbean is seeking to have addressed in relation to the UK APD are resolved, this tax could be only the tip of a global fiscal iceberg that may eventually come to include all aviation and maritime transport,” Applewhaite added, noting that “similar unilateral measures have also been introduced by other countries in Europe”.

Caribbean officials also expressed concerns about the additional burden brought on by the inclusion of aviation in the EU Emissions Trading Scheme (EU ETS) that begins next year.

Recent reports produced by Standard & Poor’s suggest that passengers could face a rise in airfares of up to 40 Euro per ticket once the EU ETS is introduced.

Aviation and sea transport were not included in the Kyoto Protocol on Climate Change due to difficulties in assigning emissions to any specific country.

At the 37th International Civil Aviation Organization Assembly Assembly in Montreal, Canada last year, there was general consensus on the need for a multilateral approach once general principles had been agreed on the implementation of market-based measures for international aviation.

“The Caribbean would prefer to see a multilateral measure that does not discriminate against one mode of transportation, is development-oriented, and which takes into account the vulnerability of the region arising from climate change,” Applewhaite said.