Adrian Loveridge Column – Need to Share COVID 19 Cost
For decades, this week has traditionally marked the start of the critical winter season where visitor arrivals and occupancy soar and when many of our hotels and tourism enterprises achieve their most lucrative rates, which during normal times, significantly contributes to absorbing operational costs during the longer softer summer season.
While the introduction of a Covid-19 vaccine has offered hope for a return to some normality in months to come, it will clearly be some time until visitor numbers return to anything like we have almost taken for granted in years past.
Consolidation of flights from major markets continue with the ongoing disruption this causes to the traveller, hotels and other accommodation options. I would imagine now that our tourism policymakers are now looking very carefully at the demographic make-up of what might become the ‘typical visitor’ to our shores over the next few months, so they can best target any promotional and marketing efforts into appealing to those most likely to travel.
There is a real danger that price may be deemed as the greatest incentive to drive arrival numbers and for many in the tourism sector that could seem the easiest option, if only just to create some vitally needed cash flow and attempt to pay the mounting bills and financial obligations.
This approach seems to have been adopted by the cruise sector, whose major players are currently offering rates as low at US$28 per person per day for sailings set to resume from US ports as early as 1st August 2021.
This, while tens of thousands of would be passengers are still awaiting refunds for cancelled cruises over the last eight months.
Ultimately, we all know it will be the taxpayer that picks up the ‘national’ cost of the pandemic. But in the interim, is there anything more that Governments’ can do to speed recovery?
I believe the answer to that is a definite YES!
Despite all the various lobbying, at the least from what has been our largest single market, the United Kingdom, over half the cost of flying on the lowest cost return economy ticket from Gatwick, Heathrow or Manchester is taken up in taxes. First the APD (Air Passenger Duty) amounting to a minimum of GB Pounds 80 rising to a staggering GB Pounds 528 per person for business and first class fares. It is estimated that APD contributed over GB Pounds 3.7 billion to the British Treasury last year.
Secondly, the two departure taxes ‘we’ impose of at least BDS$195 per person for all flights. With the single exception of those wholly within CariCom, that are BDS$70 less.
Government has to decide if it just the private sector who are expected to absorb the significant losses to the entire tourism industry during 2020 and beyond. Or are they going to share that enormous burden to help speed recovery?