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.”