The Adrian Loveridge Column – Here Comes the Departure Tax!
While I know this week’s column is going to attract some criticism in certain quarters, I believe we still have to discuss these things and to creatively help mitigate the obvious negative consequences of such decisions.
We are now just days away from the 1st October 2018 imposition of what amounts to a secondary departure tax that our cherished visitors will be forced to pay, if they choose Barbados as their destination of choice.
Every man, women and child, irrespective of age, will have US$70 (currently GB Pounds 54.60) added to the cost of their airline tickets.
Most of us fully understand the reasons why and comprehend that tourism is our main and only significant foreign currency earner, which resulted in few other choices.
What remains incomprehensible is that once again the cruise sector has escaped, or some might say, evaded, any additional tax increases.
Pretty much everything of the potential damage caused by the further tax grab, is speculation, but there are certain inevitabilities. For most of our wealthy visitors, US$70 per person, or US$280 for a family of four, will probably make little difference.
However it would be absolute folly not to fully understand that our traditional accommodation base has changed dramatically over the last few years.
Travel giant Expedia registered the greatest recent growth from their HomeAway brand, one of the main competitors to Airbnb.
With very few exceptions, Barbados will now have the highest airfares within the Caribbean, already charging a US$27.50 departure tax, compounded by VAT (value added tax) on the outbound Barbados flight section.
None of us should dwell under the illusion that we will get the business anyway. People have choices and their own economic circumstances have a profound influence on the destination decision making process.
In the case of the United Kingdom, higher inflation than anticipated, the uncertainty of the ongoing Brexit saga and the substantially lower value of Sterling against the US$, all play a significant part.
There are some little caveats to ease the pain, at least in the British market.
Both Virgin and British Airways have introduced new levels of economy fares. Those either able or willing to forgo a checked piece of luggage will, at least for now, experience some minor savings.
My guess though, this will have very limited appeal, as for most of our lady visitors, part of the anticipation and experience is in packing variable clothing options.
Canny frequent flyers can look out for lower cost alternatives. As a member of American Airlines AAdvantage for over 23 years, I can still buy a one way ticket from Barbados to London Heathrow via Miami for US$52.50, plus 32,500 miles on selective travel dates.
Presumably, the US$70 will be added to that next month?
For a very long time, targeting those who already have sufficient earned miles has been an area that should have received more marketing attention.
This will have to change if we really want to retain market share.
For those on a budget (the vast majority of our visitors), several choices will be considered, including trading down to a less expensive lodging option, reducing the intended length of stay and spending less in the destination at restaurants, attractions, activities, shopping and car rental.
Ultimately, we will be judged by delivered value-for-money and the overall welcome our cherished visitors receive.