Tuesday, October 9, 2018

The $40 security tax that will sink tourism

The cost of a return airfare to and from Banjul International Airport will cost an additional US$40 with effect from 15th January, 2019, if the government of Adama Barrow has its way. 

In a Gambia Civil Aviation Authority (GCAA) letter dated 25th September, 2018, the justification for the proposed air ticket price hike was as a result of the decision to " upgrade the security and border control system" which involves the "screening of arriving and departing travellers to ensure the safety of the air transport industry." [emphasis ours]

The GCAA was notified by either the Office of The President or the Interior Ministry that the government has "signed a contract with a security company for the implementation of the system and the new system would attract a fee."

Although the notification letter did not name the security company, we later learned that the company that provide a similar service to the Blaise Diagne International Airport in Dakar is SECURICOR.  The terms and conditions and the amount that it will cost the Gambia Government is still unknown at the time of publication.

A source told us that the "Ministry of Tourism and the GCAA had no hand in this.  The Deputy DG Civil Aviation and DG Tourism went to attend a meeting at the OP (meaning the Office of the President) and were sent home and refused entry (in)to the meeting.  Can you believe? "

The GCAA 25th September letter invited the tourism industry stakeholders to a meeting a 3rd October "consultative meeting" after all of the critical decisions, including settling for a foreign company to provide the services, have been taken.  The outcome of the meeting is unknown, but we will, in due course.

Mr. Yankuba Saidy, Permanent Secretary in the Office of the President in charge of investment was appointed CEO of the Gambia Investment and Export Promotion Agency (GIEPA) refused to move to the GIEPA offices but prefers to stay at State House instead.  The meeting held at State House was chaired by him which awarded the contract to SECURICOR.  It is not evident at this point, as indicated earlier, whether all the procurement rules and procedures have been adhered to, to avoid yet another SEMLEX scenario in our hands.  We will leave this aspect of the contract for another day.

For the moment, and as we have expressed in a Facebook entry a few days ago, the impact that a $40 price hike will have on tourism in the Gambia will be devastating.  It could kill whatever is left of an industry that faces numerous challenges that include but not limited to product deterioration, regional and international competition from destinations that provide tourists with more choices.

The tourism sector is struggling to return to its pre-Ebola strength (2014 - 2015) and to add $40 to the price of a return ticket will all but kill the industry.  Operator are worried and probably so are airline operators.  We have learned that GCAA was trying to propose a $4 - yes, four US dollars - hike which they are having trouble getting the support of the industry.  Government is now proposing a ten-fold increase which make little economic of financial sense.

When one considers that the proposed increase is coming at the heels of the decision by FTI, a major and influential German tour operator, to cancel its 2018 - 2019 Winter charter flights to The Gambia despite previous assurances that it will increase its weekly flights into Banjul.  The decision will obviously mean less tourist visitors, unless a competitor finds it commercially feasible to fill the void - a highly unlike scenario.