By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas will “conservatively” lose $20 million in tourism revenues if it maintains the new and increased taxes on the private aviation sector, an industry expert yesterday slamming the Government’s policy as “crazy”.
Jim Parker, president of Caribbean Flying Adventures.com, a top pilot’s guide for planes flying in the region, told Tribune Business that based on initial industry reaction, the Bahamas would see at least a 10 per cent reduction in private aircraft visiting this nation.
Warning that visitor numbers generated by private aircraft trips had been declining “noticeably” for the past three-four years, Mr Parker said now was “not the time” for the 2013-2014 Budget to increase the sector’s tax burden.
Estimating that the Bahamas received 40,000 private aircraft flights per year, with passengers brought in spending around $1,000 per day over four-five night stays, he warned that the tax increases could have a devastating impact on Family Island hotels and associated tourism businesses.
Mr Parker explained that the Government’s 2013-2014 Budget had introduced a new $50 Customs fee payable when a plane arrived in the Bahamas and presented its forms to Customs.
He added that the Bahamas was “the only country in the Caribbean” to impose a departure tax on aircraft pilots and crew, and this had risen in the last few years from $15 to $20 per head, and now stands at $25 per head courtesy of the Budget.
And, to top it all, Mr Parker said private aircraft were now being charged $50 for simply taking a refuelling stop in the Bahamas - not even bringing passengers in.
Arguing that this “makes no sense at all”, Mr Parker told Tribune Business: “It’s going to cost at least $16-$20 million in lost tourism revenues, and that’s a conservative estimate.
“That’s if there’s a 10 per cent reduction [in private plane arrivals], and I think it going to be more than that for the tourism sector. The Government will also be losing taxes.”
Mr Parker estimated that private planes brought around 75,000-80,000 persons to the Bahamas annually, and added: “The numbers have been declining noticeably for the last three-four years. Now is not the time to increase taxes on the sector.
“It’s a sizeable market, good business for the hotel and restaurant sector, and they’re losing money today on people cancelling their trip. It’s going to hit the Out Islands pretty hard.
“It’s going to lose money instead of increasing revenues, and is going to hurt a lot of Bahamians. They need an economist to look at this, as they’re going to lose money instead of make money.”
The pilot guide chief said the “backlash has been severe” to the Bahamas’ aviation tax increases, especially given that the sector received no advance warning.
Mr Parker added that the Florida office set up by the Bahamas to promote this nation to private pilots also seemed to have been caught unawares, and not informed in advance of the changes.
He shared some of the reactions Caribbean Flying Adventures.com had received from pilots, with comments largely along the lines of: “These people are idiots. I think I’m done flying down there.”
Some were more vocal, saying: “Total crap. Do they not want private planes to visit?”, and: “Do the governments who have implemented these fees do studies of net revenue results? I will definitely reconsider my September Marsh Harbour plans in considering this.”
Others suggested that tourism would “grind to a halt”, especially in the Family Islands, and that fuel stops in this nation should be avoided.
Others labelled the Government’s tax increases as “just plain dumb”, and one pilot said: “I have been flying to the Bahamas about twice a year for the past 20 years, and now I can promise I will NOT be flying there again with these fees just getting in and out.
“It is like the US ‘Luxury Tax’ about 25 years ago. The government had less revenue for two years, and then removed the tax to get their revenue back.
“I think the Bahamas will soon not have any Customs or Fixed Base Operation(FBO) activities at their airports.”
Meanwhile, Mr Parker told Tribune Business he would be one of those electing not to stop for fuel in the Bahamas as a result of the new taxes.
Set to fly to the Dominican Republic today, he said he was abandoning plans to refuel at Stella Maris in Long Island, and will take on a full tank in Florida.
“I’m not going to pay $50 for the privilege of buying fuel,” Mr Parker said, adding that he now anticipated “a hard time” in organising his planned 20-plane trip to Cape Santa Maria later this year.
The pilot guide executive said he had written to Glenys Hanna-Martin, minister of transport and aviation, arguing that the new taxes be overturned, and the private aviation industry given a lighter - not greater - tax burden.
In a written statement to Tribune Business, Mr Parker reiterated: “The July 1 action by the Government to increase taxes on private aviation flying to the Bahamas to spend their tourism dollars is a mistaken policy.
“One of the most important functions of airports in the Bahamas is to attract private aviation tourism dollars (which includes substantial taxes for the Government).
“The Bahamas has been a favoured destination for years, but the arrivals have been declining in recent years, perhaps because of the steady increase in airport departure taxes. The Bahamas is the only island destination that applies the departure tax to crew as well as passengers. The tax is now $25 per person, so for a little four seater plane, that is $100 just to land.”
And Mr Parker added: “The backlash has been severe, with many pilots stating that they will no longer be visiting the Bahamas. The tax also applies to fuel stops. Many pilots will look at alternate routes to avoid paying $50 for the privilege of buying fuel. This will result in further losses of revenue to Bahamas aviation fuel companies.
“The bottom line is that government revenues from private aviation tourism will decline rather than increase as a result of this ill-advised action. Any trained economist will confirm that the extra $50 is going to be more than offset by a loss of revenue to the tourism industry and the Government taxes on those revenues, as pilots stop flying to the Bahamas.
“The Government needs to quickly rethink this mistaken policy as private pilots are already cancelling their travel plans to the Bahamas. The Out Island hotels will be particularly hard hit. One simple solution is to waive the tax for private aircraft coming to the Bahamas for tourism.”
Comments
quincymeatball 10 years, 9 months ago
This is the stupidest thing that the government could have ever done-- As a private pilot, who has for the last 50 years been coming and going to just about every island in The Bahamas, who truly loves The Out Islands, now will no longer come back-- I would spend an average of 25,000.00 dollars on my several vacation per year in The Bahamas. Both this tax and the corrupt customs officials have officially turned me off-- I will not be back.
proudloudandfnm 10 years, 9 months ago
Add to that the new cost of a cruise permit for boats under 35 feet. Now at $250.00. Bimini, Abaco and the Berry's are going to lose their weekend warrior business.
I am opposed to any new taxes when we have so much still outstanding in property taxes, plus all the millions we lose at BEC, Bahamasair and the rest of our money sucking government corporations.
Clean up our government, get rid of the employees that we do not need, get overtime under control, sell BEC. Get our current tax collections cleaned up and then come back to us about new taxes. And this idiotic idea of our government starting a company to run watersports in Bimini will now add to our problems. No way anyone can convince me the government can run watersports in Bimini and NOT LOSE money. Plus that is a very communistic idea. A state owned water sports company?!?!? What's next? State owned food stores in Bimini? State owned liquor stores? They desperately need a beauty salon in Bimini to accommodate all the millionaire wives. Will our government open a beauty salon as well.
Stamp tax on imports has gone up over 100% on a huge number of shipments. With the new stamp tax coming online only this Monday I have already spent over $3000.00 on stamp taxes. Last week I would have spent $50.00 on the same shipments.
These new taxes are going to hurt us, after all none of us are getting pay raises. Very soon we will see the increases in our stores, then we'll see how Bahamians really feel about it.
PLP screwed the FNM with their accusations of mishandling the economy. Well the FNM had the single worst recession in human history to deal with. What's your excuse Mr. Christie????
I am going to say this again and I will keep saying it. We need another election ASAP. This PLP failed their first term and this term they're going to cause us great harm.....
nationbuilder 10 years, 9 months ago
Dis government is gonna destroy us if we let them
Islandgirl 10 years, 9 months ago
Mr. Christie please, please stop. You are going to destroy us. Yes, the treasury needs money. Here are some suggestions other than this, which I am sure you have heard before. Collect all outstanding casino taxes. Halt the paying of 100% of the pension of certain civil servants; we can't afford it. Cut down your cabinet size. Stop creating positions willy nilly just to enrich your buddies. Let those in retirement stay there; they are not worth the fees you are paying out. Decrease the civil service; their large numbers hurt us all, especially in the many cases where there is no value for the money spent. Stop using NIB as a cash cow; I seriously expect my money to be there upon retirement, and this 60 million for 125 "low cost homes" and 900 grand for a single audit is not cutting it; we all object. Reign in your government's spending, and most importantly, govern since you wormed yourself into power. Stop pointing fingers and take some responsibility. You all said you had all the answers. Stop this garbage and fix it. That is all.
john33xyz 10 years, 9 months ago
Stop complaining. The people love this. 92% of Bahamian voters chose either FNM or PLP. Only 8% voted otherwise.
Give us the same old, same old ????????????/ Oh yeah, we love it. We voted for it. And 4 years from now, we'll vote for MORE from the FNM (again).
You just can't teach an old dog, new tricks.
40 years, and only 3 prime ministers. Do we want change? Obviously not.
USAhelp 10 years, 9 months ago
Its better in the Bahamas hope all Bahamians enjoy cause no tourists will be coming
carlh57 10 years, 9 months ago
Bahamians will be the only tourist to this nation if we play our cards right.....thanks mr PM...your successfully shutting of this nation from income, tourism, growth and prosperity. Job well done....buffoon!
JoesSound 10 years, 9 months ago
Crime and tax chasing away the tourist. Crime and tax chasing away business.
isabella 10 years, 4 months ago
If this is going to have a negative impact on the tourism industry then the government has to reconsider their decision. Recently I was reading a blog and it expressed the view that higher cost of travel would adversely effect tourism industry. I agree completely with the view expressed on http://www.royalsunset.com/">this site, I think if you keep the costs down then you would be able to draw many more tourists.
leonardo85 10 years, 3 months ago
The authorities should consider this issue and take the right steps to rectify this situation. The tourism industry http://destinia.com/hotels/hotels-in-...">here should be given all the help and support they need to flourish.
karina 10 years, 3 months ago
The government should reconsider their decision regarding the taxes. However, these days making travel arrangements has become a lot more easier thanks to online travel agencies, if you just http://www.flightsite.co.za/">view website you will find all the information you need.
dana 10 years, 2 months ago
They should immediately remove the tax otherwise the tourism sector is going to be affected. There are many tourists who would love to http://www.internationalsherpaguides....">travel the world but the high cost of flying stops them from doing so. People would travel more if the costs come down a bit.
leonardo85 10 years, 1 month ago
If this situation continues for a long time then the tourism industry would face severe problem. Higher taxes means high air fare which most tourists wouldn't be able to afford. I work for a reputed airlines company, despite the fuel price hike we have kept our fares low. I have always wanted to work in this sector, thanks to http://www.aviationtriad.com/">Aviation Triad I found a great training program which helped me built my dream career in aviation.
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