Aviation Tax Increase May Threaten Medical Tourism to Bahamas
Once called the “playground of the rich and famous,” new and increased taxes may be pricing some visitors out of a trip to the Bahamas and, in the meantime, put a crimp in plans to expand medical tourism opportunities on the 700-island archipelago 50 miles off the coast of Florida.
Industry insiders fear that a new government tax on the private aviation sector will reverse a slow trend toward recovery in the billion-dollar tourism industry, which once attracted more than 4 million visitors a year in the 1980s and early ‘90s, but took a dive in the aftermath of the worldwide recession.
As of July 1, a new $50 customs tax has been applied to all small private planes, as well as a $25 levy per head on pilots, crew and passengers. Industry analysts say the tax will result in a $16-$20 million loss in tourism revenue by reducing the number of private aircraft coming to the Bahamas.
Private flights had numbered 40,000 per year, making the islands a favored destination for tourists like singer Miley Cyrus and super model Heidi Klum, who both visited during the Fourth of July weekend. However, a steady increase in airport departure taxes may force other less free-spending tourists to think twice and accelerate any already downward trend in airport arrivals by some 10 percent, industry experts predict.
Tourism accounts for 60 percent of the country’s GDP and two-thirds of its employment, but since the recession, the Bahamas have felt the strain. A majority of the tourists continue to be American, a good number who come not only for the wealth of beaches, but also for medical treatment.
Dr. Conville Brown, founder, director and physician-in-chief of The Bahamas Heart Center, said the islands attract patients from the United States because of the country’s proximity, is English-speaking and offers treatments for 20 percent less than comparable costs back home.
Doctors Hospital is the only Joint Commission International-accredited facility in the Bahamas. Medical tourists used to account for 18 percent of the hospital’s patients, but since the recession, that figure has dropped to about 11 percent, the hospital’s president, Barry Rassin, told Tourism Today Bahamas.
Spinal Surgery Center
Rassin hopes to build a spinal surgery center in Nassau within the next six months and then a center for hips, knee and joint replacement the following year to attract more medical tourism patients and, along with them, a steady stream of revenue. The hospital boasts a prostate cancer treatment program as its first medical tourism initiative.
Moreover, representatives of American World Clinics have met with the Bahamian prime minister and local health professionals to discuss development of a $250 million, 1,500-square-foot hospital that would not only attract medical tourism patients and locals, but create more than 200 jobs for the community as well. AWC will use a business model that involves exporting medicine, doctors, and staff from the United States to compliment local physicians.
“It is predicated on a core of specialty surgical procedures and sophisticated diagnostics, but we can add a wide range of medical specialties to expand and grow the enterprise depending on market opportunities and the needs and interests of the local community,” said Dr. Paul Angelchik, CEO of AWC. “We strive to be good corporate citizens, and give to the local communities through economic development, jobs, and knowledge and technology transfer because those are important objectives of our company.”
These investments might be joined by a new casino, one which is supposed to attract more travelers to the Bahamas, and continue tourism branding efforts.
“The reason most resorts in the Bahamas fail is they never find out what the attraction is that their decision to have a resort is based on,” said architect Pat Rahming, who is involved in the planned construction. “There is no such thing as sports tourism, there is no such thing as medical tourism, there’s no such thing as religious tourism. There is only tourism. Sports is the attraction, medical is the attraction, and if we understand that, we have a chance to develop some vitality in this business.”