The governments of Barbados and its regional neighbours have been severely criticized for their increasing “appetite for taxation of the tourism industry” which is biting into the sector’s earnings.
And president of the Caribbean Hotel and Tourism Association (CHTA) Josef Forstmayr has called for countries to overhaul their tax policies or risk losing visitors to other destinations – an appeal endorsed by president of the Barbados Hotel and Tourism Association (BHTA) Colin Jordan.
Forstmayr addressed the undue hardships being imposed on the industry as the 16th annual Caribbean Hotel and Tourism Investment Conference (CHTIC) opened today at the Sheraton Puerto Rico Convention Centre.
Far from responding positively to concerns expressed by tourism players in the past, Forstmayr, who is Managing Director of the Round Hill Hotel and Villas in Jamaica, said government taxation has “continued to increase unabated”.
“We hear of new policies that tax not only the private sector but also our visitors directly. These masquerade under such names as airport improvement taxes, tourism enhancement fees and, by far the worst of all, the dreaded UK’s Airline Passenger Duty (APD),” he said.
“Increased taxation is regressive . . . . Our governments must make a serious effort to review their taxation policies on the tourism industry. It is time now to remove or at least reduce excessive consumption taxes on our visitors, not to increase them.
“It is also time to rethink old policies which call for an increase of these taxes. Our industry is based on competitive pricing and our visitors will simply choose other destinations which may provide better value,” Forstmayr added.
He further called for meaningful tax incentives which attract the investment that is needed for the Caribbean to maintain its appeal and competitive as a world class destination.
The CHTA head said failure to ease the tax burden on the industry will not only result in less revenue for the hotel and tourism sector, but will negatively affect the wider economy due to tourism’s links to domestic manufacturing and agriculture.
Jordan, who is attending the conference, later told told NATIONNews that Barbados, which is recording lower visitor spend even though arrivals remain high, has a lot to lose when taxation is excessive.
“We risk losing visitors to other countries and we also risk creating a situation where if people come they spend minimal because prices are high,” he warned, adding that the tourism sector could not pass on increases in input costs to its customers as other sectors do.
“We’re competing against countries . . . where visitors can get lower prices, and we’re competing against cruise. So we can’t just raise prices because then the potential visitor says it’s a little too expensive and will ask the travel agent the second best place they recommend.”
Forstmayr stressed during the opening ceremony that travel and tourism is the region’s most vital export – with record tourist arrivals over the past two years in the midst of the recession – and the fastest way to create jobs and grow the economy.
He said the sector’s contribution is highlighted in a recent study done by the Jamaica Hotel and Tourism Association on travel and tourism as a driver of economic development in that island, and the CHTA will be working with consultants Tourism Economics to develop a similar study for the entire region.
Meantime, CTO chairman Richard “Ricky” Skerritt told the delegates that while much has changed since the recession began in 2008, what has remained constant is that the Caribbean is the most popular warm weather destination in the world.
“In spite of the scary financial and fiscal transformations taking place around us, we know that there is still a strong demand for leisure Caribbean travel and that is why we have to continue to work together to reach those markets and to compete in the global marketplace,” he said.
