21 Nov 2013

Academic says Fiji's departure tax hike will be 'invisible' to most tourists

6:07 pm on 21 November 2013

A tourism specialist says Fiji's impending hike in airport departure tax is likely to go unnoticed by most tourists because it will be included in the airfare.

As part of its budget, the Government has announced the tax will increase from US$81 to US$108 from January next year.

The tax will also include a US$5 environment levy.

Auckland University of Technology's Tourism Research Institute director, Simon Milne, told Amelia Langford that the tourist industry is no doubt disappointed by the hike.

SIMON MILNE: It's a fairly substantial increase, but for most travellers it's going to be invisible because departure taxes in most of the South Pacific and all round the world are usually embedded in the ticket price that you pay. So for the consumer it's probably going to have a small impact, but I doubt that it will have a major, lasting impact in terms of visitor numbers to Fiji. I don't think it will have a major impact, also, in terms of visitor flows. What I would think is that the tourism industry there will be disappointed because they will fear there's another cost being added and tourists are always a very easy target when it comes to generating additional government tax. But the bottom line is this is an embedded tax. It's not something that people have to shell out of their wallet when they leave the country.

AMELIA LANGFORD: So it could be a different story if they had to pay it separately.

SM: Absolutely. If you think about the way that you or I travel, whenever you do go to a place where you find yourself having to shell out for money at the airport, it's not always the best of experiences. And if you were shelling out NZ$140 or NZ$150 that would have quite an impact. And that's why these taxes are embedded into the airline tickets in most parts of the world. And there'll be no difference in this case. I think what's particularly interesting to me is the way in which this has been presented by the government in Fiji as also being an extra source of funding to help them protect and sustain the natural environment. That is a fairly interesting approach to take. It perhaps neutralises, or they hope to neutralise, any criticism on that basis. I guess the question really has to be asked, though, will this money go into a specific environmental protection fund, or is it really just a bit of lip service being paid and the money is just going to go into the general government coffers anyway? That's not overly clear to me at the moment.

AL: How would this tax, at the rate it is at the moment, compare to other pacific countries?

SM: It's higher. It's certainly higher than all of Fiji's competitors that I'm aware of. Certainly it's higher than the Samoan departure tax. It's higher than Cook Islands, higher than many of the islands which are direct competitors with Fiji. But when you compare it to some of the costs that you incur in places like the UK, where there are environmental levies, et cetera, being put on to tickets, the amount is actually a lot smaller. But in terms of regional competitors, in terms of the South Pacific, this new fee - Fiji $200 - will be a fair bit higher than other competitors in the region.