Adrian Loveridge, Peach and Quiet

The Adrian Loveridge Column – Making it Cheaper to Travel to Barbados

Adrian Loveridge

Adrian Loveridge

The British Government is being urged to use the upcoming autumn financial statement to remove Advanced Passenger Duty (APD) altogether in a bid to ensure the UK remains attractive in a post Brexit world. Airlines UK and the Board of Airline Representatives (BARUK) in the UK have teamed up to appeal to Chancellor Philip Hammond. Airlines UK is the trade body for UK registered airlines which currently has 11 members, including British Airways, Virgin Atlantic, Thomas Cook and Thomson, all of which serve Barbados.

According to their website their objective is to ‘work with governments, regulators and legislators to promote the interests of UK airlines and with organisations across the sector to encourage long-term sustainable growth in aviation’. After a prolonged period of relatively low fuel prices the continuing crises in the Middle East is now forcing crude oil costs up. This combined with the Sterling currency fluctuation caused by the uncertainty of a Europe without the United Kingdom and the resulting near 20 per cent fall in value, when compared with the US$.

Most airlines buy forward to combat the increase in the cost of fuel, but the double whammy of a depleted value of sterling and the hike in Jet A1 fuel prices, which have to be paid for in US Dollars, have combined to create an almost ‘perfect storm’ in the UK airline industry.

Not surprisingly the airlines are looking from every possible viewpoint what could influence keeping fares down because they know higher seat costs will result in less people travelling.

The other unknown is the dreaded ‘I’ word, inflation. In 2015 the UK was rated as the world’s 9th largest exporter. Good news you would think, with a lower value of Sterling making British goods and services more attractive and less expensive. But the UK is the 6th largest importer, resulting in virtually all those products becoming at least 20 per cent more expensive.

In March 2017 the British Government will change the way it measures inflation, to include home owning costs. This will inevitably increase the rate of inflation, resulting in the Brits having reduced disposable income or in our interests, less to spend on foreign holidays.

From our perspective, there are a few positives on the horizon. Virgin have recently changed their frequent flyer or loyalty programme making it easier and quicker to earn sufficient miles to fly ‘for free’. In realty of course, when you pay the taxes and other add-ons to miles tickets, there is still a substantial cost, but it is at a lower price option than a full fare ticket or another way to upgrade your seat preference.

Sadly, our marketing gurus rarely consider frequent flyers in the overall promotional picture, despite some experts calculating that one in ten of our total visitors, use miles to reach us.

What cannot be disputed is that the majority of business people amass their miles to use on leisure travel and once again I call for a dramatically re-designed airport landing form which includes the question, ‘did you use your frequent flyer miles to reach us’?

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17 Comments on “The Adrian Loveridge Column – Making it Cheaper to Travel to Barbados”

  1. Lee November 21, 2016 at 8:09 AM #

    We can help avoid the real threat of our own uncontrollable currency devaluation by offering British travelers a 10 -15% discount. Need strategic leadership in the industry !!

    Like

  2. Adrian Loveridge November 21, 2016 at 8:58 AM #

    Lee,

    we already do this with our re-DISCOVER initiative (www.re-discover.com. The real challenge is to persuade the tourism partners to accept the concept of revenue control, just like most hotel chains, airlines, car rental and other sectors in the industry adopt and implement.
    Some restaurants would rather have lots of empty tables at 6 or 6.30pm rather than offer a specially priced menu for early diners.

    Like

  3. David November 21, 2016 at 10:45 AM #

    Monday 21st November 2016

    Published on Monday, November 21, 2016

    Air tax pressure mounts as Autumn Statement approaches

    Pressure is mounting on the government to reduce Air Passenger Duty in its Autumn Statement on Wednesday, with easyJet, British Airways and Ryanair the latest to add their voices.

    MPs are calling for a 50% reduction in the tax, which is one of the highest in the world, and say it should then be scrapped altogether.

    Ireland has already scrapped APD and Scotland is planning to reduce APD by 50% in 2018.

    Virgin Atlantic CEO Craig Kreeger said: "MPs are right to question why the UK has the highest tax on long-haul flying in the world. Cutting APD would boost trade, inbound tourism and support families. It would be another clear signal to the world that Britain is open for business."

    The chief executives of easyJet, BA and Ryanair, who are all members of Airlines for Europe, warned in a joint statement that APD is ‘hampering growth’.

    BA chief executive Willie Walsh said: "Other countries which have scrapped their aviation taxes have seen an immediate boost to their GDP and tourism. Why saddle businesses and tourists with a tax that your European competitors do not have?

    "APD is well past its sell-by date and must be scrapped."

    EasyJet chief executive Carolyn McCall said: "It is not just visitors to the UK the tax affects – people travelling between London and Edinburgh for example are currently being hit twice as hard by paying £13 each way on the flights.

    "So, removing APD could also strengthen the connections within the UK."

    Ryanair chief executive Michael O’Leary said: "The Irish Government scrapped this tax in April 2014, which resulted in immediate traffic and route expansion at Irish airports and an influx of high spending tourists to Ireland, with passenger numbers reaching record levels (from 23 million in 2012 to 32 million in 2016).

    "We call on the UK Government to follow the Irish example and scrap APD for everyone, to allow Britain to become competitive and stimulate job creation and tourism."

    ABTA said it welcomed the recent steps that have been taken to reduce the overall burden of APD on UK consumers and businesses, particularly in relation to the scrapping of bands C and D, and the abolition of child APD.

    But it added: "However, APD remains the highest comparable air tax levied anywhere in the world, far exceeding the levels charged by our nearest competitors elsewhere in Europe.

    "In order to ensure a competitive and fair rate of APD across the UK, ABTA is calling on the Government to reduce APD by at least 50% on short-haul and long-haul flights. A reduction of APD by 50% is the only way for the UK Government to prevent unfair situations arising whereby levels of tax are determined by a consumer’s postcode. As we start negotiations with the EU, it will make the UK more competitive internationally and demonstrate that the country is open for business."

    Pilots union BALPA said APD should be scrapped completely.

    BALPA General Secretary Brian Strutton said: "Pilots are pleased to see that MPs are putting pressure on the government to reduce air passenger duty but more needs to be done. We would like to see a removal of this unfair tax.

    "We have been calling for air passenger duty to be scrapped for many years and especially post-Brexit we need to ensure the British aviation industry remains competitive.

    "The industry needs support in these uncertain times and a further rise will only serve to discourage Britons from air travel."

    Like

  4. Robert Mac Donald November 21, 2016 at 11:16 AM #

    In regards to you re-discover Barbados initiative: I think it is a great idea, however in order for it to be successful it must be known about. Have the promoters considered a handout to arriving passengers along with non competitive touristic promotions, similar to Little Switzerland ?

    Like

  5. Adrian Loveridge November 21, 2016 at 1:01 PM #

    Robert,

    Yes we have considered, but are restrained by a very limited budget. All the background work is done entirely free of cost.
    We have a little support from the BTMI, Scotiabank, Atlantis Submarines and a few minor sponsors but need additional funding. Having said that we currently have a full page ‘ad’ in the Thomas Cook inflight magazine that will be viewed by over 2 million captive travellers.

    Like

  6. Vincent Haynes November 21, 2016 at 1:10 PM #

    How can we(Caribbean region) with a straight face ask for a reduction in APD,when all of us are charging our own citizens such high taxes to travel within the region?

    Like

  7. David November 21, 2016 at 1:31 PM #

    @Adrian

    Robert makes a good point. It makes no sense to design a good program if there is not a greater awareness about the program.

    Like

  8. Adrian Loveridge November 21, 2016 at 1:40 PM #

    David, ‘awareness’ costs money and I think it is amazing what we have done with so little.

    Like

  9. Robert Mac Donald November 21, 2016 at 1:45 PM #

    I understand that there is a price for everything. No idea what it cost to put an ad in the inflight magazine, which is reaching a wide audience I admit. The audience you wish to contact is basically persons who visit Barbados. In my opinion the money may have been better spent locally targeting arriving visitors! I am not in advertising so just an opinion.

    Like

  10. David November 21, 2016 at 1:46 PM #

    Agree, however to grow the program the sponsors onboard or potential must sponsors must be persuaded to support the program to move to the next level.

    Like

  11. David November 21, 2016 at 2:06 PM #

    Caribbean Trade & Development Digest – November 13-20, 2016

    Posted on November 21, 2016 by caribbeantradelaw Leave a comment

    These are some of the major trade and development headlines and analysis across the Caribbean region and the world for the week of November 13-20, 2016.

    For past issues, please visit here.

    REGIONAL NEWS

    Antigua & Barbuda PM calls for immediate intervention on climate change US President-elect Trump

    Caribbean News Now: Prime minister of Antigua and Barbuda, Gaston Browne speaking at a high-level meeting of the 22nd Session of the Conference of Parties (COP22) in Marrakech, Morocco, called on all government and special groupings in the United Nations to commence discussions with the incoming Donald Trump administration in the United States on climate change. Read more

    CARICOM Council Representatives want to expand Caribbean Trade

    Prensa Latina: Representatives of the Caribbean Community (CARICOM) Council for Trade and Economic Development advocated Friday for the strengthening of the links between the member countries, to achieve a greater regional trade, in a forum in Guyana. Read more

    OECS and Brazil Agree to Promote more Trade and Investment

    Caribbean News Now: The November 14-17 Brazilian-OECS Business and Parliamentary Mission to Saint Lucia and the OECS has ended with several projects identified for follow-up by business interests in Brazil and Saint Lucia – and the rest of the OECS.Read more

    Former Barbadian PM wants Jamaica to rescue CARICOM

    Jamaica Gleaner: A former Barbadian prime minister is strongly suggesting that Jamaica and other Caribbean countries latch on to the Caribbean Court of Justice (CCJ) to give the Caribbean Community (CARICOM) a boost of confidence.Read more

    BVI Concludes Investment Promotion Study Tour in Jamaica

    Caribbean News Now: The British Virgin Islands has concluded an Overseas Countries and Territories (OCT) investment promotion study tour in Jamaica. Read more

    INTERNATIONAL NEWS

    APEC Leaders Push Back against Protectionism

    VOA News: Leaders of 21 Asia-Pacific nations have ended their annual summit with a call to resist protectionism and protect the Trans-Pacific Partnership (TPP) trade pact, which has been thrown into uncertainty after the election of Donald Trump as U.S. president. Read more

    China pledges to lead the way on Trade

    Financial Times: President Xi outlines vision amid fear of US disengagement from Asia under Trump. Read more

    As Trump kills TPP, Asia turns to RCEP

    Global Trade Review: In the aftermath of Donald Trump’s victory in the US presidential election, Asia Pacific states are turning their focus to the Regional Comprehensive Economic Partnership (RCEP), longed viewed as a rival deal to the Trans-Pacific Partnership (TPP). Read more

    Support for EU rises since Brexit vote, survey shows

    Financial Times: Popularity of union confounds anti-Brussels sentiment — even in Britain Read more

    CETA is ‘no gold standard’ finds Report ahead of Parliament vote

    Eurativ: New research has found that the EU-Canada trade deal fails to deliver on environmental promises and does nothing to encourage the transition to renewable energy or to enforce other climate mitigation measures called for in the Paris Agreement. Read more

    NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

    Trump Presidency: What Priorities for US-Caribbean Economic Engagement?

    Caribbean Reflections on Soft Power (Guest Article)

    De-Risking remains “a key priority”, according to US Treasury

    WTO: G20 Trade Restrictions remain High Despite Slowdown in Measures

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  12. NorthernObserver November 21, 2016 at 2:54 PM #

    I will suggest that “frequent flyer miles” is about as old as the cellular phone. People collect points, dollars etc which can be used for travel in many ways. Loyalty credit cards are a big one. As are other ‘loyalty’ based products. So you likely wish to expand and ask “exactly how did you pay for airfare, hotel etc on this trip. Because it can be from different sources, which has nothing to do with FF programs.

    Like

  13. Adrian Loveridge November 21, 2016 at 3:00 PM #

    Northern Observer. A good point, but I specifically mentioned air travel and I think its a given that MILES can be accumulated in so many ways just by selected a preferred method of payment. Which non-miles loyalty cards can be used to pay for airfare please?

    Like

  14. NorthernObserver November 21, 2016 at 3:14 PM #

    All the credit cards. Example. I have a Bank Visa card where I get points based on my credit card spending. They have a program with expedia, (and others) where those points are converted to $$, and I can spend them on air, hotel, rental cars etc. My family trip at Xmas to St.Maarten the entire airfare is paid for by Visa credits, which had little to do with prior travel. The hotel partly by Air Miles, which despite the name, the credits were earned largely via multiple retail purchases and the redemption possibilities are like an old Sears catalogue, the rest of the hotel came from another credit card loyalty points.
    All these loyalty programs are tied together at the hip.

    Like

  15. NorthernObserver November 21, 2016 at 3:23 PM #

    Appreciate many small to medium sized businesses are run today via credit card. The suppliers hate it, but if it means getting a $60,000 invoice paid in 15 days, the CC cost is simply another cost of doing business. Many of these firms are racking up massive loyalty points, which can be used in many ways. Travel being only one. Some folks have it down to a fine art. Points pay for all groceries, petrol, in some cases insurance and car leases. They even transfer them to employees as a form of bonus payment!!!

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  16. David November 21, 2016 at 5:18 PM #

    The same discussion we have been having about the lack of transparency in Barbados regarding Sandals is also taking place in T&T. The difference is that T&T have FOI.

    We could then have a proper discussion that rises to the level of consultation that eludes us thus far. But the manner of this project’s progress raises two critical concerns beyond the financial and procedural. They are legal. One should recall that in advance of this announcement, the Prime Minister informed us that he had taken over control of the tourism product in Tobago. We also need to consider the relevance of the Aliens (Landholding) Act. Control of tourism in Tobago rests in the hands of the Tobago House of Assembly (THA) under a schedule of the THA Act. It is not there as a gift from a sitting Prime Minister to Tobago. Rather, it is given by way of an Act of Parliament.  My concern therefore is about the right or lack thereof to remove that power back to central government without approval by Parliament. Is this power now to be treated as discretionary, to be given and taken away at the whim of the Prime Minister of the day? If yes, will the same apply to the imminent Autonomy Bill? Where do the various political parties stand on this? There is absolutely nothing wrong with the Prime Minister being a key player in this or any other transaction. That should be applauded. I do not see how he can legally take control away from the THA.

    Amazing how many people are NOT questioning the selection by the PM of SANDALS for a major hotel/resort project. Is this the PNM’s concept of open & transparent governance, procurement etc?  Should Prime Ministers decide which company must be awarded projects with no project details and that’s it? After GTL, Sulphur plant, eTeck, NAPA, Tarouba, PF HIghway, Beetham Waste water etc, shouldn’t the people demand more information about these mega projects with no open & transparent procurement process?

    At a minimum, shouldn’t the people know what we are giving away (2 billion land, tax holidays, infrastructure spending etc) and how much we will be getting back?

    Even while doing that they boast of open & transparent procurement and even while allegedly giving away a $2 billion piece of land with incentives (all secret) they tell tell you the procurement for a Diwali roti dinner that costs almost 2 millions times less! (Note no rantings about procurement, costs etc for Emancipation or Xmas or Eid or Easter or Baptist Dinner but only about roti as if the problem is really "roti" and the "roti’ people).

    Of course, Kamla and the UNC govt engaged in mass freeco with mass corruption but the people simply took it, said they liked Kamla more than Rowley but if Rowley and his govt think that means the people condone the PNM corruption, crime wave, recession & depression then they will be dealt with the same way people did with Kamla and company. 

    Rowley and company could try all the digression they want but they will not be allowed to escape responsibility and accountability for crime, recession, corruption, shady deals, mismanagement and a comatose government. 

    —————-

    Critical concerns about Sandals project

    DAVID WALKER Monday, November 21 2016

    I AM NOT so bold as to dispute the contention put forth by the Prime Minister that the proposed Sandals development will be the most significant thing to happen to the Tobago economy in a generation.

    After all, I do not have onetenth of the information at my disposal as compared to the Prime Minister. Yet I need to share some concerns and to ask to be guided by the dissemination of relevant information. 
    Firstly, I do not have to be convinced about the bona fides of Sandals as a company and a brand. It is the equivalent of buying a Mercedez-Benz if seeking a vehicle. Who could criticise such a choice? But surely you would first choose from within the range according to your needs and your pocket. You would not select a van for driving to and from work. 
    Similarly, I ask what is the nature of the proposal from Sandals? Without that we may end up with a proverbial van. 
    I note that in Sandals CEO and Deputy Chairman Adam Stewart’s recent presentation to the Chamber of Commerce he referred to the benefits of the plan they have for Tobago. We now know that there is a plan, something that we had been told previously did not yet exist. 
    I can’t imagine that he could give the projections that he did unless the plan was quite advanced. Effective consultation demands that it be shared with us. We do even know for sure how many rooms are to be built or where. 
    With respect to the anticipated net gain annually to the economy of $500 million, is it asking too much for a simple breakdown between taxes (PAYE, corporation, sales etc), purchases, wages and anything else? Can we be told who pays for the construction and what will be the total cost to us of the development, including water and electricity contracts? What will be the net foreign exchange footprint, positive or negative and how much? If the resort does in fact comprise 750 rooms, then the claimed benefit equates to $1,826 per room per day at 100 percent occupancy and $2,029 per room per day at 90 percent occupancy. I need some convincing about such a projection. 
    We could then have a proper discussion that rises to the level of consultation that eludes us thus far. But the manner of this project’s progress raises two critical concerns beyond the financial and procedural. They are legal. 
    One should recall that in advance of this announcement, the Prime Minister informed us that he had taken over control of the tourism product in Tobago. We also need to consider the relevance of the Aliens (Landholding) Act. 
    Control of tourism in Tobago rests in the hands of the Tobago House of Assembly (THA) under a schedule of the THA Act. It is not there as a gift from a sitting Prime Minister to Tobago. Rather, it is given by way of an Act of Parliament. 
    It is the law of the land. 
    My concern therefore is about the right or lack thereof to remove that power back to central government without approval by Parliament. Is this power now to be treated as discretionary, to be given and taken away at the whim of the Prime Minister of the day? If yes, will the same apply to the imminent Autonomy Bill? Where do the various political parties stand on this? There is absolutely nothing wrong with the Prime Minister being a key player in this or any other transaction. That should be applauded. I do not see how he can legally take control away from the THA.

    http://www.newsday.co.tt/commentary/0,236214.html

    Like

  17. David November 24, 2016 at 9:31 AM #

    Chancellor ignores industry pleas on APD

    Nov 23rd 2016, 14:2

    Chancellor ignores industry pleas on APD

    Chancellor Philip Hammond made no changes to of Air Passenger Duty (APD) in today’s Autumn Statement, disappointing industry hopes of a cut.

    Airline lobby group Airlines for Europe (A4E) had even demanded APD’s abolition ahead of the Chancellor’s statement. But the Chancellor made no mention of APD and documents released by the Treasury to accompany Hammond’s statement do not refer to the duty.

    The Airport Operators Association (AOA) expressed disappointment, as did the Board of Airline Representatives in the UK (BAR UK), which represents 70 airlines.

    AOA chief executive Darren Caplan said: "The Chancellor has failed to seize the opportunity to cut APD and demonstrate the UK is open for business.

    "Halving APD would have sent out a signal internationally and encouraged airlines to schedule more routes to the UK and fly more frequently on existing routes, boosting the UK’s connectivity."

    Caplan said: "The AOA will continue to make the case that APD is unfair on families and a tax on the UK’s global competitiveness and connectivity. 

    "APD is one of the highest air taxes in the world and, with our nearest neighbours charging nothing or less than half of what the UK levies, it harms our global competitiveness."

    Dale Keller, chief executive of BAR UK, agreed saying: “The airline community remains committed to its campaign to reduce APD and ultimately abolish it.

    "We believe the government is ignoring a key tool in its efforts to boost global competitiveness and to send a positive message that the UK is open for business as we head towards a post-Brexit future that could catapult the UK out of the European common aviation area."

    Keller said: "Another EU country has just acted with Austria announcing it will cut local aviation taxes 50% by January 2018, making the UK look increasingly isolated."

    Caplan added: "We note the Government has published a summary of responses to its consultation on how to support regional airports in England from the potential effects of APD devolution but has not announced its preferred course of action.

    "A cut in APD anywhere in the UK should be matched immediately by a cut everywhere, so no parts of the country are disadvantaged. We call on the Treasury to publish a plan that sets out how and when this can be delivered.”

    Cheapflights managing director Andrew Shelton said: “The government ignored recommendations from the travel industry and parliament to tackle APD, meaning UK travellers will continue to lose out.

    “By kicking the issue into the long grass, saying it will be dealt with when the UK leaves the EU, the government has paved for way for a much more complex travel tax system that can only bring confusion and uncertainty.

    “Had calls for APD to be halved been heeded, a family could have saved up to £328.50 annually – these savings have now been lost.”

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