IATA warns Caribbean about price of travel
The International Air Transport Association (IATA) warned Caribbean destinations on Wednesday that they are “running the risk of pricing themselves out of the global travel and tourism market, where passengers have more choice than ever before”.
IATA vice president for the Americas, Peter Cerdá told the Caribbean Aviation Day conference in the Cayman Islands that the region “needs to remain an attractive tourist destination”, adding that often it is difficult to see the correlation between aviation fees and the service provided.
Cerdá told the conference that the World Travel and Tourism Council (WTTC) forecasted a possible annual 6.7 per cent travel and tourism GDP increase between 2022 and 2023 if the right policies are implemented.
He said that as the world emerged from the novel coronavirus (COVID-19) pandemic, the good news was that people wanted to travel and this was made very clear by the ongoing recovery.
“Global passenger air traffic has reached 74.6 per cent of pre-crisis levels,” Cerdá told the event, which is being held under the theme “Recover, Reconnect, Revive”.
“A recurring theme is also taxes and charges levied on aviation. Yes, we understand that the provision of adequate infrastructure for aviation comes at a cost, but very often it is difficult to see the correlation between the level of costs and charges, and the actual service provided.”
To illustrate his point, Cerdá said that in some Caribbean destinations, if passengers are not arriving during “regular” local business hours, airlines are being charged significant overtime fees for each passenger to be processed by immigration and customs.
“Aviation is not a 9 to 5 business,” he said. “Global connectivity is around the clock. This process is simply unacceptable and makes no sense as those very same passengers are the ones staying at local hotels, eating at local restaurants, and fuelling local economies, no matter what time they arrive. So why penalise and charge airlines extra who transport these passengers?
“Why not change the mindset and adjust customs staffing levels accordingly and attract more airlines to the market?”
Cerdá said that the taxes and fees added to airline tickets substantially increased the cost of air travel to and from the region.
“By way of comparison, at a global level, taxes and charges make up approximately 15 per cent of the ticket price, and in the Caribbean, the average is double this at approximately 30 per cent of the ticket price,” he said, adding that in some markets, taxes, fees, and charges make up half of the total ticket price.
The IATA VP said that for flights from Barbados to Barbuda, taxes and fees were 56 per cent of the ticket price, and 42 per cent from Bahamas to Jamaica, the same as from St. Lucia to Trinidad and Tobago.
To fly from Port of Spain to Barbados, taxes and fees account for 40 per cent of the ticket prices.
“In comparison, Lima, Peru, to Cancun, Mexico, another beach destination, taxes and fees only represent 23 per cent,” he said.
“Today’s passengers have a choice and as the total cost of vacations increasingly becomes a decision-making factor, governments must be prudent and not price themselves out of the market,” he said.
Cerdá said that a flight for an eight-day vacation from London to Bridgetown in October is around U.S. $800 – but a flight from London to Dubai for the same time frame is U.S. $600.
“For a family of four, that is an U.S. $800 difference just for the flights,” he said, noting that from Miami to Antigua, it costs around U.S. $900 for a round trip ticket for the same dates in October – but from Miami to Cancun averages around U.S. $310 for a round trip ticket.
“Again, for a family of four, that is a total difference of over $2,000 just for the flights.”
Cerdá said that air travel demand was close to reaching pre-pandemic levels, “but to support a sustainable aviation sector as an integral part of the tourism value chain we need governments to cooperate among themselves and with the industry”.