Everything Caribbean

Tour operator says imposition of ABST will kill business


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.

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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.

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

“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”.

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