US Transit Gives Bahamas Small APD Edge

US Transit Gives Bahamas Small APD Edge
By Natario McKenzie

The Bahamas may have “a little bit of an advantage” over other Caribbean countries when it comes to being impacted by the UK’s decision to raise air passenger duty (APD) rates by 8 percent, the minister of tourism and aviation said last week.

Vincent Vanderpool-Wallace told Tribune Business this was because many of the Bahamas’ UK visitors travelled through the US on the way to this nation, thereby capitalizing on that country’s lower banded rates.

The British government on Tuesday announced its decision not to change its Air Passenger Duty (APD) banding structure, with the 8 percent increase set to be imposed from April 2012, thus increasing airlift (access) costs to the Bahamas and other Caribbean countries for European and British visitors.

Mr. Vanderpool-Wallace told Tribune Business: “In the case of the Bahamas we are at a little bit of an advantage compared to the rest of the Caribbean, because so many of our visitors from Europe and the UK come via the US.

“So, in effect, what they are getting is the US banded rates for their flight to, say Florida, and connecting over to the Bahamas. We are at a little bit of an advantage but it’s not a substantial advantage compared to the rest of the Caribbean. At least ours is not plugged into that situation.”

Mr. Vanderpool-Wallace added: “I think certainly everybody in the Caribbean is disappointed that some of the changes that were expected didn’t come into effect. I think at the very least the Caribbean region thought they should have been made equal, in terms of the cost of the tax, with the United States. At the very least the Caribbean was hoping that there would be some revision to the banding, but it appears that they were unsuccessful in lobbying for that change.”

The APD rise has sparked outrage among Caribbean hoteliers and tourism executives, with Caribbean Tourism Organization (CTO) chairman, Ricky Skerritt, calling the announcement on the APD rise “a slap in the face” for the region.

Bahamas Hotel Association (BHA) president, Stuart Bowe, told Tribune Business yesterday that the APD rise was “disappointing”, and the association was behind the regional tourism development agency, the CTO.

“Five percent of our business comes from the UK. We are definitely concerned about the APD. We are very disappointed in it, and are very supportive of the CTO and what they are trying to do in trying to address this issue,” Mr. Bowe told Tribune Business.