Caribbean Economist Wants Action on Tourism Competitiveness

Even as Caribbean tourism experiences a robust recovery and strong demand, a leading Caribbean economist and advisor wants action-oriented thinking and solutions to improve the competitiveness of the region’s bread-and-butter tourism industry.

Speaking on the sidelines of IATA Caribbean Aviation Day in the Cayman Islands this week, Trinidadian economist Marla Dukharan said that price competitiveness is a challenge.

Caribbean Aviation Day, the theme of which was “Recover, Reconnect, Revive”, brought together industry experts, senior aviation executives, and government officials to discuss the sector’s key opportunities and challenges across the Caribbean region with the aim of identifying how to jointly rebuild a more competitive air transport sector in a post-COVID world.

“The IMF (International Monetary Fund) found that airlift is the single most important factor that determines the amount of tourists that come and also the revenue that we get from the tourism sector,” Dukharan said, adding that it impacts tourism activity more than room stock or the availability of hotel rooms.

Airline ticket taxes, the lion’s share of which go to regional governments to help boost infrastructure and provide travel-related services, was a contentious issue during the conference with Dukharan positing that taxes constitute some 30 to 40 percent of the total cost of airline ticket prices.

“Our governments need to address (taxes),” she said, disclosing that another major regional challenge is the dis-ease of doing business within territories and across the region.

“Those are some of the factors that drive up the cost of doing business and make this the most expensive region, in terms of tourism and vacations,” said Dukharan, who believes as the most tourism-dependent region on earth, the Caribbean has to solve these problems.

“Otherwise, five years from now, 10 years from now, we will be singing the same song, lamenting the same problems and our economies would be much more affected by the fact that we haven’t solved these problems. We need to solve these problems now,” she stressed.

“Unless we make change here, then this is just a party … and you know, we have carnival for that,” she argued. “We really need to make sure that we take action as opposed to just having a nice time getting together in person.”

A number of ideas – from creative forms of taxation to the reduction and elimination of taxes on inputs – were discussed during the conference, with calls also being made to review previous studies and proposals to help address the vexing taxation and cost-of-doing-business issues.

IATA Caribbean Aviation Day was supported by the Caribbean Tourism Organization and the Government of the Cayman Islands.