Higher APD significantly cuts UK travel to Caribbean Post November 09

Higher APD significantly cuts UK travel to Caribbean Post November 09

As the latest rise in the UK’s air passenger duty (APD) looms on 1st November, Cheapflights Media, an international media network providing users with different ways to find low cost travel, has been tracking the impact of APD on traffic searching for Caribbean destinations on it’s UK site over the past year following the UK’s introduction of the sharply increased four tier APD in November 2009. 

Annual traffic data to end September 2010 for eight popular Caribbean destinations on Cheapflights.co.uk shows an average annual 11.6% drop in Caribbean destination searches compared to the previous year. This chimes with the recent statement by the head of the Caribbean Tourist Organisation (CTO), Hugh Riley, that visitor numbers to the region from the UK had fallen by 12.2% since November 2009 when the then new four band Air Passenger Duty (APD) placed the Caribbean in Band C, the third most expensive tax band.  Air Passenger Duty is applied to tickets for all passengers departing from the UK by air - including on return tickets bought in the Caribbean area.  The four (2000 mile) bands are calculated on the distance from London to the capital city of the destination country.

The link between the cost of the Caribbean’s Band C APD and the current reduced demand from the UK is supported by the fact that Cheapflights.co.uk annual online searches for the popular destination islands of Jamaica and Barbados have seen 13.2% and 23% falls respectively.  This is in the context of overall increased traffic to the UK site, whilst over the same period the CTO reports seeing a small overall annual increase in visitors to both islands. 
Introduced in 1994 at a sustainable level which was levied until February 2007, after this November 1st , APD will have risen 275% above pre-2007 rates for all cabin classes to the Caribbean!  In Band C APD, from November 1st 2009, Economy passengers for the Caribbean were obliged to pay £50 tax per seat and Premium Cabin seat passengers paid £100 tax a head.  APD will increase again on November 1st 2010 to £75 and £150 respectively.  Bizarrely because of the capital city distance from London measurement rule, after November 1st economy seats for Band C destinations will cost £15 more tax at £75 than seats for Band B Hawaii (7230 miles) at £60.  This is even though Hawaii is nearly twice as far from the UK. 

Mr Riley also stated: “APD must be a contributory factor in the decline in visitors from the UK” he added. “It is logical that if you increase the cost of a product then you reduce demand.”

Carol Hay, Caribbean Tourism Organisation director of marketing for UK and Europe said: “We are very concerned to hear of the variance in Cheapflights UK’s year-on-year search traffic for Caribbean destinations since the launch of the four tier Air Passenger Duty last November.  We appreciate there may be many factors at play in such statistics; however it adds weight to our argument to politicians that all destinations and all British travellers are being affected by such high taxation.”

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Francesca Ecsery, Cheapflights’ global sales director, commented: “APD is a regressive tax and it is evident that it hurts not only those consumers least able to afford it, but also all those economies dependent on tourism from the UK.  Faced with such statistics, it is difficult to avoid the conclusion that APD is having a significantly negative effect on travel from the UK to the Caribbean.  A family of four travelling Economy class from the UK (or returning home to the Caribbean)  will have to pay £300 (US$473.25) in tax as from 1st November. Premium class will pay double that!  Hence it’s no wonder that Tourism Ministers from the CTO have been lobbying the UK Government to at least relegate the Caribbean into Band B.”