The St. Vincent and the Grenadines Hotel and Tourism Association in February wrote to Minister of Finance Camillo Gonsalves expressing concern about the Climate Resilience Levy, which would be passed into law on May 3.
However, notwithstanding the group’s concerns about the potential negative impact of imposing a tax of US$3 per night on land-based visitor accommodation, the government went ahead and passed the levy into law and has set June 1 as the date when it takes effect.
The government says that the money generated by the levy would help the country respond more swiftly to climate change-related events and their impact on public infrastructure and the natural environment.
However, in the Feb. 15 letter to the finance minister, head of the SVG Hotel and Tourism Association, Fitzroy O. Glasgow asked the government to reconsider the tax or to delay its implementation until January 2019.
In making his organisation’s case, Glasgow noted that during the budget consultation, tourism stakeholders had expressed concern about the implementation of the tax in the middle of the year “after our rooms rates have been published, rooms pre-booked and new deals negotiated with our partners in various marketplaces”.
In the letter, which was copied to Minister of Tourism Cecil “Ces” McKie and Chief Executive Officer of the Tourism Authority, Glen Beache, Glasgow that the SVG visitor accommodation sector experienced in 2017 a lower occupancy level than in 2016.
“For a destination that struggles each year to achieve a national occupancy level of 50%, this is extremely disturbing,” he said of the tax.
“Additionally, this sector has been investing monies in upgrading individual establishments in order to fully comply with the recently introduced Tourism Standards,” he said.
Glasgow said that while tourism stakeholders acknowledge that the completion of the Argyle International Airport — which began operating on Feb. 14, 2017 — is an extremely welcomed development, “at the same time, we recognise that the full positive effects of this development will take some time to be fully realised.”
He said part of this is due to the absence of critical mass in visitor accommodation, which commercial airlines see as a critical component in determining whether to serve a destination with scheduled flights.
“We once again take this opportunity to request your kind assistance in accessing affordable and creative funding for local visitor accommodation establishment to upgrade and expand thereby joining in the national effort to increase our room stock.”
Glasgow further told the finance minister that SVG, “despite its potential for tourism development, continues to experience difficulties in competing with the rest of the region, and indeed with the rest of the world.
“The imposition of this tax on visitors in land-based accommodation only is likely to result in this destination becoming even more uncompetitive that it already is.”
Glasgow said that tourism stakeholders understand the need to be able to respond quickly and more effectively to the impact of climate change.
He, however, said that his organisation believes that “the introduction of this Climate Resilience Levy has the potential to have a debilitating effect on the local tourism sector is impose as planned on May 1st, 2018.
“We believe further that the industry as a whole needs some time to recover from a weak performance last year, and urge the government to reconsider its decision on this tax or delay its implantation until January 2019,” Glasgow said.
During the debate on the levy, opposition Members of Parliament expressed concern about the potential impact of the levy on the tourism sector.
However, Gonsalves did not share the opposition lawmakers’ concerns.
“I don’t believe so and I think that that is overstating the impact of the US$3,” he said.
The minister quoted the average rates at some hotels in SVG 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.
Before the bill was passed, Parliament changed from the first 45 to the first 30, the number of days for which a relevant visitor would pay the tax.
This government listens to anyone. They feel they can do whatever they want. The hotel association even asked for the law to be introduced at a later date because rate have already been set, but no, they went ahead and did it anyway. Only time will tell.
1. The 50 percent occupancy rate, perhaps the lowest in the entire Caribbean, is for the nation as a whole. Since the Grenadines occupancy rate is much higher (as I have verified several times by comparing several hotels and resorts on the mainland to their counterparts in the cays for the same date), I estimate that the annual mainland occupancy rate is a pitiful 30 percent.
2. Yes, there will be slow growth in airline visits here partly, … due to the absence of critical mass in visitor accommodation, which commercial airlines see as a critical component in determining whether to serve a destination with scheduled flights.
But this is a superficial assertion because it doesnt explain the current low occupancy of the exiting visitor accommodations which could easily accept thousands more air travellers. This assertion would only be valid if all our mainland hotels were now so bursting at the seams that Any more tourists would see them sleeping on the beach.
What is more critical for a holiday destination than absolute visitor accommodation is the interest and effort of tourists to visit as determined by airline surveys of existing visitors and other research as well as ongoing growth trends in visitor travel numbers which is a function not just of lots of luxury accommodation but of lots of desirable attractions, features which are lacking on the mainland compared to other places, including our very own Grenadines.
Accordingly, his association should also be strongly lobbying the government to refurbish our existing visitor attractions, clean up and restore Kingstown, develop new rural and urban attractions, spend millions more on advertising, and many other things it has chronically failed to do in the past.
But there is no guarantee or strong expectation on my part that this would have much effect on transforming the mainland into as desirable tourist destination largely because of our absence of the key attraction the tropical holiday evidence says we absolutely need to succeed miles of pristine white sand beaches fronting shallow aquamarine waters.
Again great information C. Ben. Unfortunately no one with any decision-making power pays any attention to you or anyone else that gives them good advice that can improve the country. We can expect the “liberal-thinking” people to attack you again because you say how things are and they only want to read information stating the way they want things to be.
This guy is acting like a bully what the hell is his papa doing by now he should have been taken out to the shed n taken care of I’m quite surprise the people of SVG is not saying more on this subject is it they don’t know or don’t give a dam
Sylgringo, the reason no one says anything is because the citizens of SVG have been reduced to field slaves and fear the bullwhip.
Wow what a shame the people of SVG afraid to speak out against injustices by papa and son .remember the sound by Hooper (2008) who E hut E hut. I guess they will take the whip until it no longer hurts.
Why is the FM is so foolhardy about raising the hotel tax in the middle of the season, despite seemingly rational arguments that this is ludicrous and counterproductive?
St.Vincent and the Grenadines, have some of the best, unspoiled holiday destinations in the world.
(And, I believe that the mafia is there too.)
There are miles and miles of unspoiled pristine white sand beaches in this nation that can compete with the best locations in the world.
We need to protect our goose that lays the golden eggs and be more tactful in dealing with it.
This Nation consists of an Archipelago of thirty-two islands, where upwards of 80% of the citizens live on the big island and, most don’t have a clue about what is going on the smaller islands.
The ULP have done some stupid things, but I don’t believe that they are crazy.
(because they actually built an international airport)
Looking at the question that the FM put to the Hotel and Tourism Association: You are talking about 1 to 2 percent. Youre 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. Thats going to thwart tourism in St. Vincent and the Grenadines?
Maybe the FM knows something that the rest of us don’t know. It takes a thief ……., as the saying goes.
I agree that for the client, changing the price after a done deal, would be jolting, but for the hotel owners, it might mean something else.
The bottom line remains that St. Vincent and the Grenadines need to get its house on order. (so that we can be the rulers of our destiny)
The problem is whilst it may be only 2% on US$150, it is 6% on bills where hotels charge US$50 and more than 6% where hotels charge less. So this is a high tax on small hotel guest’s. The rich can afford 2% but the less than rich travellers are being targeted with a much higher tax. Small hotels will feel the brunt of any backlash and may have to initially absorb the tax themselves on pre-bookings, that’s how unfair it is.
Why is the FM is so foolhardy about raising the hotel tax in the middle of the season, despite seemingly rational arguments against doing it at this time?
The ULP government have done many stupid things, but this surely takes the cake.
One could conclude that either the FM knows something that the rest of us don’t know or that he is totally ignorant about good business practices.
Coming back and changing the price after you already agreed to a price, is not fair.
The bottom line remains that St. Vincent and the Grenadines need to get its house in order.
When you are on an Italian government blacklist for money laundering (aka tax-haven), then people know that the mafia is not far behind.
This tax and spend government in power, will come up with other ways to spend this room tax, maybe they might use to to pay back the Venezuelan government for the cheap oil they got a few years ago.
This is what we are missing out on, a Marriott Hotel
They [the Governments] will soon begin to sell corpses and blood to overseas corporations and allowing pharmaceutical companies to experiment on our populations.
Comments are closed.