By Bengt Mortstedt
I am the owner of Bequia Beach Hotel, probably one of the biggest — if not the biggest, with regards to number of rooms — hotels in St Vincent and Grenadines, after the Buccament Bay Resort went into receivership about one and a half year’s ago and after Raffles left the Canouan resort and most of the approximately 150 rooms there was converted to staff- and workers-accommodation or were demolished.
The hotels in St Vincent consist of, by international standard, small, family-owned-and-operated hotels.
With regards to yearly occupancy rate, I would think, based on my own experience, it is well below 50 per cent or even 40 per cent or 30 per cent. Average yearly occupancy rate in hotels in nearby Caribbean countries, I believe, rage between 60-70 per cent. Why is our occupancy level so low? It has to do with access and that we are in an expensive location to operate in. Flights coming to Argyle International Airport will ease access and cost for tourists visiting St. Vincent but lesser for the Grenadines. Budget travellers going to Bequia (other islands out of reach) would not mind the extra taxi travels and ferry and possibly extra waiting time. High-end travellers coming here do not care if they change aircraft in Barbados, St. Lucia or St. Vincent, as they anyway have to change aircraft somewhere to be able to get to the Grenadines. They will do it where it is most convenient.
We are expensive. A lot of the food and even fruit the hotel restaurants serve has to be imported, as the local produce do not always meet high-end tourists’ request with regards to quality or quantity. Total duty, VAT and various fees and transport cost add to the total cost of operation. Our hotel’s purchase price of, for example, wine, add to over 100 per cent when import duties and other costs are added which makes it substantially costlier to purchase than in most countries in Europe. We will therefore not be able to take out the European hotel’s margins, same with most food and cost of electricity to be in competition.
The politicians have staked out SVG’s future is tourism. An overnight stay person in a country spends up to 40 times more in the local economy than a visiting cruise ship passenger! The Government should, therefore, promote the existing hotels as well as promoting new hotels to be built.
Overseas guests can choose among a number of destinations around the world, which at first glance presents better value for money than St. Vincent and the Grenadines.
My strong view is the Government of St Vincent and the Grenadines should do everything in promoting and simplifying for their chosen way forward for the country: sustainable tourism. They should make sure existing hotels survive and flourish. To bring in new taxes, announce duties and force new administration on to these mostly small enterprises is, in this context, the wrong way to go.
Since I started my various investments in SVG some 12 years ago, directly employing some 240 Vincentians, I have seen introduction of VAT — raised once, increasing and then doubling of the departure tax, and now introduction of a legislated new room tax of EC$8 per room per night, whilst our tourism industry standards have not vastly improved. I can not see justification for further charges to be implemented. All this also creates much extra administration for the operators, which also cost money and takes time that could be used to promote and to enhance their businesses. From a hotel’s point, to announce increased Government costs/taxes to tour operators and loyal guests, whatever the reason, sends a very negative signal to them, also to the ones already booked for the coming season. This tax also directly hit the most important type of visitors — the stay overnight visitors. Even if other countries have various taxes and duties they do not have the business challenges we have here with short seasonal business, complicated and expensive access and high costs.
I wish the Government would revise their strategy and find some other way to take out this increased tax or look how to reduce spending.
Editor’s note: This article was initially submitted as a comment under our article, “Hoteliers urged to speak publicly about new room tax”.
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