Virgin Atlantic's Richard Branson labeled it "a suffocating tax that has rocketed way out of control."

A London lobby group called A Fair Tax on Flying bombarded the British Parliament with tweets, emails and petitions, railing against it.

Industry and association leaders, from the World Travel and Tourism Council (WTTC) to the Association of British Travel Agents, ASTA, most airlines, the Caribbean Tourism Organization (CTO) and destination representatives have condemned it, denounced it, campaigned against it and opposed it for more than three years.

Richard Doumeng, president of the Caribbean Hotel and Tourism Association, described it as "a travel nightmare for U.K. visitors to the Caribbean and a significant threat to the sustainability and growth of Caribbean tourism."

"It" is the U.K.'s Air Passenger Duty (APD), which taxes passengers from the U.K. based on mileage and distance flown, and it has drawn the ire of the travel industry, particularly in the Caribbean region.

And with good reason. Caribbean visitor numbers from the U.K. are down, and tourism officials lay the blame, in part, on the impact of the APD.

"The recession has hurt us, but so has the APD," one tourism minister said. "The combination of the two has been lethal."

For 2011, the CTO reported a decline in arrivals from the U.K. for the third straight year, "mainly due to a weak economy and increases in the APD."

Visitors from the U.K., who represent St. Lucia's second-largest market after the U.S., have declined every year since 2009, according to Prime Minister Kenny Anthony.

"In 2010, tourist arrivals from the U.K. fell 19.4% below the 2008 level; in 2011, numbers fell 14.4% below 2008," Anthony said.

"This decline in arrivals is further exacerbated by a reduction in on-island spending as the tax has had a negative impact on travelers' budgets," he said. "Tourism receipts associated with these declining numbers in the last three years have fallen more than 25% below the 2008 level."

The CTO also cites a 20% drop since 2008 by Caribbean nationals living in Britain.

Patricia Affonso-Dass, president of the Barbados Hotel & Tourism Association, calls it "an unfair and discriminatory tax."

Thirty-four percent of all visitors to Barbados hail from the U.K. "at the present rate and with continued increases still planned for 2013 and beyond, the Caribbean in general and islands like Barbados in particular are under serious threat," Affonso-Dass said.

Increases in the APD have resulted not only in a decline in holiday visitor and diaspora traffic from the U.K. but also a drop in visitor spending, forcing hotels into discounting to keep the price of a holiday attractive, according to Affonso-Dass.

The tax, first introduced in 1994 as a British environmental tax aimed at offsetting aviation's carbon footprint, was calculated on a two-band system, one for European destinations, one for all other destinations.

That two-band system remained in place, despite a tax increase in 2007.

The APD issue heated up in April 2009 when rules for a much higher, four-band, mileage-based tax were announced.

The tax amount was calculated on the distance between London and the destination country's capital city.

The U.S. is in Band B, using Washington as the capital; the Caribbean is in Band C because their capital cities are farther from London, making the APD higher for U.K. travel to the Caribbean than to Florida, California or even Hawaii.

The four-band rules took effect in November 2009, boosting the average tax from $53 to $67 per passenger for travel to the Caribbean. It later rose to $100.

And despite intense lobbying by prime ministers, tourist boards and airlines, the tax has continued to rise.

In the latest go-round, Caribbean officials argued for the return of the two-tier tax, and parity in banding with the U.S.

Not to be. Arguments fell on deaf ears, the British government flatly rejected all pleas and set an 8% APD increase to take effect in April, which it did.

As a result, U.K. travelers to Jamaica are taxed $145 per economy ticket and up to $290 per ticket in all other classes of travel.

The tax from London to Port of Spain, Trinidad, starts at $186 per passenger in economy.

A family of four flying from the U.K. to the Caribbean now pays close to $625 in taxes. In 2005, the same family paid $125 in taxes.

Of further concern to the Caribbean and other tourism destinations that depend on U.K. arrivals was the announcement that an inflationary increase would be applied to APD as of April 1, 2013.

CTO Chairman Ricky Skerritt pointed out that "the rate of APD to the Caribbean already is too high and discriminates against the Caribbean because of the way that it is structured."

The APD continues to damage Caribbean economies and people "regardless of whether they work in tourism or not," according to Skerritt.

The chorus of voices raised in protest now is even stronger. Virgin's Branson publicly declared that it was "obscene" for the U.K. Treasury to be "taking 10 million pounds [approximately $15.7 million] every day from visitors and British holidaymakers alike."

Some 44 Parliament members are backing a campaign to reduce it, modify it and even kill it.

An alliance of British carriers and tour operators is urging Parliament to support a motion to launch a study on the negative effect of APD on ordinary families and their ability to travel by air.

The U.K. has the highest air passenger tax in the world, and "all the hard work put into building tourism is hindered by this unfair levy," according to a U.K. group called the TaxPayers' Alliance.

Early this month, St. Lucia's prime minister Anthony, who also is chairman of the 15-member Caricom (Caribbean Community) organization, complained to George Osborne, British chancellor of the exchequer, that "the Caribbean understands the fiscal challenge faced by the U.K. in raising revenue, but we do not believe that APD should be imposed unfairly or at the expense of the Caribbean economy and our community in the U.K."

Doumeng said Anthony's complaint underscores the seriousness of the impact of the APD on the region.

WTTC President and CEO David Scowsill told Caribbean stakeholders at the recent Caribbean Tourism Summit in Jamaica that killing the tax would actually help the U.K. "Removal of APD would result in an additional 91,000 British jobs being created and 4.2 billion pounds [about $6.5 billion] added to the economy in 12 months," he said.

For Caribbean and Mexico news, follow Gay Nagle Myers on Twitter @gnmtravelweekly.


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