In view of the most recent dramatic changes, due to Covid -19 developments, both at home and overseas, is it time to think again about lifting some, if not all of the taxes and levies imposed on our tourism industry, at least until there is some evidence of recovery?
It must be obvious by now that many of our tourism businesses are not going to survive a further prolonged period without some sort of meaningful inducement or relief. Despite all the challenges to the private sector in terms of employment there still remains a large number of salaried people who apparently have little or no possibility of losing their jobs or experiencing lower incomes or reduced working hours, notably public workers.
A reduction in airline taxes was promised several months ago, but so far the secondary added US$35 for flights within Caricom and US$70 for all other destinations is still applied.
A bevy of ‘replacement’ airlines were canvassed and persuaded to introduce Barbados flights on the basis of these assurances, which only subsequently to led to a reduction of planned services, due to the still high intra-Caribbean fares and reduced demand.
Long haul airlines have launched attractive sale prices for early 2021 which means that you can fly from London to Barbados for as little as GB Pounds 324 return for the lowest economy class ticket, but still well over half of that figure is taken up in Government taxes.
As and when travel restrictions are lifted in the United Kingdom and other major markets, inevitably there will be pent up demand, but clearly this is going to be price driven, at least during the initial booking stages.
Of course, Government desperately needs revenue to pay for what many consider a massive oversized civil service, plus its loan and other obligations, but most of us realize that it will be printing money for years to come to cover the true cost of the pandemic. Surely it is better to ensure that our remaining tourism industry is in a fit state to be sufficiently operational when recovery starts to take place?
It is not of course the tourism players who benefit from the lowering or removal of VAT, room and other levies, but the actual consumer.
Some of our hotels and other accommodation offerings have been very proactive with promoting staycations, but is that going to be enough to pay their bills, at least for the next six months?
Ultimately, any Government can only extract taxes in so many ways.
If that means the ultimate point- of-sale cost ceases to be globally competitive, then if those taxes cannot be collected from locals or overseas visitors, it will be forced to find alternative borrowing sources.