By Carl Joseph
“This tax will see more people staying in the hotels,” a local tour operator said in response to the October 1 deadline set by government for excursion firms to commence paying the 15 percent Antigua and Barbuda Sales Tax (ABST).
Eli Fuller, owner and operator of one of the island’s largest local excursion companies, Adventure Antigua, continued, “It will have a negative effect on excursions; there’s no doubt about it.”
Fuller described the tour industry as a non-essential component of the tourist’s experience.
“If tourists sit on the beach and all they do is drink rum punch, and then they go back to their hotel room and go have their all-inclusive dinner… how is that really helping the whole country?” Fuller queried.
“We need to get them out of the hotel and it needs to be local entrepreneurs getting them out of the hotels.”
Fuller cited the Florida Caribbean Cruise Association (FCCA) assessment of the Antigua market saying, “of all the places they go to in the Caribbean, the cost of excursions in Antigua are the highest. And, therefore, the cruise ships make the least amount of money in Antigua.”
The primary reason for that, he said, was the high cost of transportation on island.
Therefore, he reasoned, if the increase due to taxation is simply passed on to the tourists, as has been suggested by Tourism Minister Charles Fernandez, “every time you add on tax to things like excursions, you see fewer people buying them”.
Tour operators had originally been given an 18-month reprieve from paying the tax as had been set out in the ABST legislation enacted in 2006. The moratorium was to allow a transition period for them to facilitate guests booked before the law took effect.
Minister Fernandez indicated on Monday that the tax had never been collected even after the moratorium ended.
But Fuller countered that the terms of the 2006 moratorium had been negotiated between the government and two of the larger players in the industry.
“Those guys were consulted about the ABST back in 2006 … and they didn’t consult with the small Antiguan operators,” he said. “You would think that there would be some consultation with the persons in the tour sector. You haven’t seen that.”
Fuller said that the industry has been suffering for years, adding that in 2003, there had been over 40 local excursion operators on island.
“The numbers have dropped so much since the early 2000s,” he said, explaining there were only a handful of local tour operators left because so many had either left the country or gone bankrupt.
Fuller accused successive government administrations of turning a blind eye on excursions, an integral part of the tourism product.
“Among other challenges that we face, the increased competition is coming directly from hotels,” Fuller said, mainly because tax concessions and the tremendous scale at which the hotels operate afford them the ability to offer tours in-house.
He listed a number of hotels that he said are buying their own boats. “And every time they buy a boat, you see a local Antiguan drop out of the market,” he added.
Fuller said the local tour operations are also facing competition from an influx of “new, foreign-owned excursions” that are operating mostly in the south of the island at ports such as Jolly Harbour, English Harbour and Dickenson Bay in the north.
“A lot of these guys are American, English, Canadian, German or whatever… running boats with husband and wife teams and they are not employing any Antiguans,” Fuller claimed.
He is alleging that this activity is being done under the radar “because nobody checks”.