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Tourism Minister Dr. Ernest Hilaire recently highlighted the pressing issue of high taxes affecting the regional tourism industry.
Dr. Hillaire strongly stressed the urgent need to address the soaring airfares and flight challenges in the region. He strongly suggested that tax cuts are a key solution to ease the situation, make regional travel easier, and address air transport capacity challenges.
Dr. Hillaire also stressed the importance of analyzing the adverse impact of high taxes on travel and its negative impact on economic activities. He said this is a pressing and important issue that requires immediate attention and decisive action by the relevant authorities.
Dr. Hillaire said the region is still working to overcome air transport challenges, although Caribbean airlines continue to do an excellent job; Caribbean airlines are also making progress with flight schedules to various regions.
“Delivering regional services is challenging, so we need solutions from both the public sector and the public-private sector to ensure we cover all available options,” he told reporters at a recent press conference.
The tourism minister said regional authorities are optimistic about the return of LIAT 20. He added that in this year’s fiscal expenditure budget, Prime Minister Philippe J. Pierre allocated about $1 million “to support any regional initiative that we believe will help promote interregional travel in the Caribbean.”
While tourism officials welcomed the potential for increased air traffic from major source markets, with particular attention paid to operations from American Airlines and JetBlue Airways, which are expanding service, the regions are still grappling with interregional flights.
Dr Hillaire noted the government had a “vested interest in this (regional travel) and a keen interest in making sure it happens”.
The Minister of Tourism is a keen advocate of making it “easy” for regional tourists to travel in order to boost growth in the regional market.
The region’s tourism ministers are due to meet next week, with the top topic being: “What can we do to reduce the cost of travel?” And it all comes down to the high taxes and fees that visitors to the region have to pay when traveling through the region.
“Taxes are quite high,” he added. “Can we do a ‘modelling’ with the numbers to see if we can reduce the tax level and make a recommendation to the finance minister to reduce the tax level in the hope of getting more people to travel…”
Dr Hillaire added: “The numbers are not growing fast enough, partly because of the cost, but also because of the shortage of seats. So we’re going to keep working on that.”
As the region hosts more entertainment and sporting events, what are the prospects for offering “travel packages” to travelers to the region to share the cost of expensive air travel? What role can ferry services play in providing alternative travel measures for travelers to the region?
He noted that the “package tour” proposition was not currently a viable option for air operators given the current cost structure of the regional tourism industry.
The minister declared: “If government taxes make up more than half of the cost of a private or airline company…how much of a ‘discount package’ can you offer when the bulk of the fare is not even yours.”
“So we need to talk about government taxes because the government already collects taxes because that’s the source of revenue they use to pay for the new airport terminal upgrades and the new airport,” he explained.
Given this situation, Dr Hillaire stressed: “We have to make the argument that if people come to your country because it’s cheaper here now… and these people coming here will lead to greater economic activity.
“We need to study and analyse this, high taxes are a disincentive to travel.”
Dr. Hillaire noted that despite plans to expand the route to southern St. Lucia, the ferry service still faces challenges.
He also said that one of the reasons many people are reluctant to travel by ship is that it takes too much time to cross the channel from one area to another.
For example, a sea trip can take five to seven hours, while air travel between specific islands takes at least 45 minutes. However, he noted that the ferry service between Holy Island and the French Isles “works very well,” so “there is a culture of using ferries between these islands.”
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