The increased rate of Air Passenger Duty is being blamed for a 51% slump in searches by UK travellers for flights to the Caribbean.
Data collated by price comparison company Cheapflights found a drop in consumers searching for flights to Barbados, Jamaica and Mexico together with other long-haul destinations.
It also found a 34% decline in searches for flights to the UK from North America, impacting on inbound tourism.
Cheapflights analysed search patterns for Barbados, Jamaica and Mexico and other long-haul destinations for the first six months of 2009, 2010 and 2011.
APD was altered in 2009 to four higher, mileage-band based tax zones for economy seats and an even higher four-band tax for premium class passengers including premium economy. The tax was raised again in November 2010 and now costs a family of four travelling in economy to the Caribbean £300.
Head of Cheapflights corporate communications John Barrington-Carver said: “Clearly, with a respective 51.3% and 25% drop in traffic since the higher rate four band APD was brought in, Barbados and Jamaica have good reason to expect the UK government to remove the current anomalies in APD.
“A significant concern for the UK economy is the evident drop in searches for the UK from North America and elsewhere over the period. With the strong Australian and Canadian dollars one could have expected an increase in searches for the UK. Instead we have a 5% drop from Australia and a very significant 34% drop seen in Canadian searches for London.
“Domestically, the UK’s airport operators are claiming that, according to Civil Aviation Authority statistics, passenger numbers at Britain’s smaller airports have fallen by up to 70% in the past four years.
“Cheapflights’ analysis appears to bear out the reasons why five other European governments have dropped [their equivalent of] APD as revenue raising exercises. Having tried the duty they discovered that such taxes cost the economy more than they raised in revenue.”
He added: “High jet fuel prices have clearly increased fares but have not prevented the 2010 post-recession global bounce in air passengers.
“It’s therefore difficult to avoid the conclusion that APD is deterring UK consumers from seeking fares to the Caribbean and other long-haul destinations. Importantly for the UK economy the opposite is also evident, especially from North America.”
The UK government has just completed a consultation on APD that saw Caribbean governments, the Caribbean Tourist Organisation and UK aviation and travel companies highlight the negative effects the high level of taxation is having.