IATA urged (23-Feb-2011) the Icelandic Parliament to drop its proposed EUR1.53 tax on passengers departing the country. IATA submitted research to the Icelandic Parliament which showed that tourism is extremely price sensitive. Increasing the cost of flying by 10% results in an 11% fall in price-sensitive visitor arrivals. [more]
IATA: “The proposed tax on tourism makes no sense to an economy that is struggling to recover from the impact of the global financial crisis. Don’t kill the goose that lays the golden eggs. At 15%, the tourism sector’s relative contribution to the Icelandic economy is the biggest among Western European countries. Aviation should be nurtured as a key economic catalyst not strangled with taxes. Any new tax would be a body blow to the tourism industry that could slow the projected growth at a time when the economy can least afford it. Iceland has a competitiveness handicap. Don’t make it worse by adding costs with new taxes. The government’s long-term policy should be to reap the economic benefits of tourism by making it as affordable as possible to visit. Turning away price sensitive tourists with new taxes is short-sighted madness,” Director General and CEO, Giovanni Bisignani.