Minister of Finance, Camillo Gonsalves has responded to concerns expressed in Parliament that a new hotel room tax passed into law on Thursday would affect visitor arrivals.
“I don’t believe so and I think that that is overstating the impact of the US$3,” he said of the Climate Resilience Levy, which comes into effect on June 1 and will see visitors paying EC$3 per room per night for the first 30 days of their stay.
The minister quoted the average rates at some hotels in St. Vincent and the Grenadines and put the levy in context relative to the rates.
“You are talking about 1 to 2 per cent. You’re talking about somebody coming to spend at Grenadine House $150 a night and you are telling them that for the environment you have to pay $153, not $150. That’s going to thwart tourism in St. Vincent and the Grenadines?” he said in response to opposition concerns.
“Then the argument you’re making to me is that tourism in St. Vincent and the Grenadines is competitive solely on price. And I believe that that is a false argument.”
He said SVG’s competitive advantage in tourism has never been price because the nation is one of the most expensive destinations to get to.
“And the budget minded tourist doesn’t come to St. Vincent and the Grenadines. He can get a cheaper stay in Jamaica if he is coming from the United States or Greece. And, Mr. Speaker, it doesn’t take into account other factors that go into price competitiveness, like the departure tax, for example, which is twice as high in St. Lucia, but St. Lucia has a vibrant tourism sector.”
Gonsalves said such an argument also doesn’t consider various customs duties, hotel accommodation tax, service charges and “the very generous incentives that we give to our local hoteliers here…
“And I submit, Mr. Speaker, and we would borne out by the data, that a $3 charge on an average of $150 per room is not going to be the determining factor in whether someone comes to St. Vincent or how long someone stays in St. Vincent or whether they come back to St. Vincent because we have a unique and special tourism product here…”
Gonsalves said that SVG is expecting larger numbers of tourists.
“And we have to recognise that with this influx of tourists will come environmental costs and we have to deal with it and the tourists are not upset about making a small contribution to the environment of the beautiful country that they have come to visit.
“I believe, Mr. Speaker, that this particular piece of legislation would enhance, protect our environment, will contribute to our contingency fund, will improve our readiness, in the case of disaster, will help us, both before and after, the eventuality of a natural disaster and I think it will have minimal to negligible impact on tourism, on tourists and on this wonderful product that we call St. Vincent and the Grenadines,” he said.