Could a new kind of “dynamic taxation system” fix the problem of high air ticket prices in the Caribbean?
That’s the idea by Nicola Madden-Greig, the president of the Caribbean Hotel and Tourism Association.
Madden-Greig says the “heavy burden” of taxation is one of the biggest issues facing Caribbean travel, and Caribbean governments could rethink their tax models to solve it.
“For example, governments can affix a higher airline ticket tax in the peak winter season and lower taxes in the summer when demand is weak,” she said.
Madden-Greig suggested that a dynamic system could actually result in a net gain in tax revenue to governments in the region.
“As travel becomes more affordable and we stimulate more travel, this will result in more local spending, and consequently an increase in local tax collections,” she said.
She was speaking at the recent IATA Caribbean Aviation Day in Grand Cayman.
“I think it’s a concept that should be explored,” said Madden-Greig, Jamaica-based Group Director of Marketing & Sales at The Courtleigh Hospitality Group. “There’s a way to do it that allows for flexibility so you still have taxation on the front end, but when you need to drive demand, you can reduce those taxes and make up the difference on the tail end,” she said. “This could definitely answer the call for reduction in taxes, but not a reduction necessarily all year-round.”
The CHTA holds its Caribbean Travel Marketplace event in San Juan this week.