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Jamaica’s tourism competitiveness has dropped to number 65, eight less than it ranked in 2008, and five less than 2009, says findings by the World Economic Forum. The organisation ranked Jamaica 57th in 2008 in its travel and tourism competitiveness, and by 2009, the country dropped to 60th.

In a letter objecting to a proposed US$10 tax increase in the Tourism Enhancement Fund (TEF), the International Air and Transport Association (IATA) assistant director, Cyriel Kronenburg, said, “Jamaica already has a problem with the price competitiveness of its travel and tourism industry.”

He contends that the increase proposed by the tourism minister would do nothing to alleviate this significant problem. “It only makes matters worse.”

According to the aviation expert, who has responsibility for IATA members and government services, perhaps the most compelling argument against increasing an already heavy burden of taxes on aviation passengers can be found in comparing the gross revenue of tickets sold for Jamaica with the Americas region.

“Gross revenue growth from sales in the region far outpaced the growth in actual tickets sold, indicating a healthy growth in the industry. However, when we look at Jamaica, gross revenue of sales has decreased by double digits over the same period, the effect of added taxes and fees in a market with limited price flexibility tax added to all other fees and taxes on a ticket for Jamaican passengers,” he said.

Another tax coming November

Kronenburg cautioned that another proposed hike of US$8 per passenger for the Jamaica Civil Aviation Authority (JCAA) makes it an extremely uncompetitive environment for airlines to operate in. The JCAA tax is expected to take effect in November. With the increase in the TEF, this would be US$28.00 per passenger, and this does not include airport and terminal fees, passenger facility charge, or airport-improvement fee and departure tax.

“This is an unsustainable situation that will have long-term effects. The revenue raised from the tax will be far outweighed by the economic benefits that are foregone as a result of the eventual reduction of demand for air travel and the loss of traffic due to airlines choosing other destinations over Jamaica,” he warned.

Gaining momentum

Objection to the planned increase to the TEF has been gaining momentum, and the local airline association, Board of Airline Representatives of Jamaica, headed by Tom Scarlett, has also written to Minister Bartlett expressing its concern, say sources.

President of the Caribbean American Foundation in South Florida, Dr Bevan ‘Duke’ Earle, commenting on the issue, said his group also opposes the increase.

“We in the diaspora cannot at this time afford another $10 increase, especially when jobs cannot be found, wages are frozen, and the high cost of living that is affecting every household, bearing in mind that only the flying passengers are holding the brunt of these taxes,” he said in a letter to The Gleaner.

Earle lambasted those who he said had made such a decision. “They did not think of the travelling public that has been sacrificing to make ends meet, but merely a political decision. It’s like killing the goose that lay the golden egg. I will suggest to those that have made such a decision: take a deep breath before it’s too late.”

Last weekend, at the annual general meeting of the Jamaica Hotel and Tourist Association, Minister Bartlett said he had no intention of backing down from the new taxes.

Source: Jamiaca Gleaner