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Hotel Room

The main opposition New Democratic Party (NDP) is calling on hoteliers to speak out publicly about the impact on their operations of the EC$8-per-night levy, which came into effect on June 1.

“Hotel operators, for God’s sake, I tell you, speak up. It is not too late. Don’t wait for me, don’t wait for the members on this platform here to take your fight all the time. Don’t speak in a boardroom. Speak publicly and say how you feel about the tax. What more can they do to you? They’re taking away your livelihood. Don’t let them think, as Poorsah say, that yo’ left yo’ mouth in a yo’ mumma,” Opposition Leader and NDP president, Godwin Friday said Sunday at a rally in Greiggs to mark the NDP’s 40th convention.

Hotel operators have remained silent on the levy, but their umbrella body, the St. Vincent and the Grenadines Hotel and Tourism Association, wrote, in February, to Minister of Finance Camillo Gonsalves expressing concern about the Climate Resilience Levy, which would be passed into law on May 3.

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.

Speaking on Sunday, Godwin Friday, who is the opposition spokesperson on tourism, said that the Vincentian economy “is failing, businesses are closing, and people are daily losing their livelihoods, and sadly, many are losing hope.

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“Like agriculture, our tourism is in decline. Can you believe that this government– the geniuses running our country– have just imposed a tax on hotels and guest houses of $8 per room per night?” he told party supporters.

“They say to raise money for fighting effects of climate change.  They have done this even though the Eastern Caribbean Central Bank figures have shown that the stayover visitors in St. Vincent and the Grenadines, the numbers have declined significantly over the past ten years.

“So why tax a declining industry? They want to kill it, like they killed bananas? You see, they don’t really care just as long as the government gets its cut, they don’t care about the rest of us,” Friday said.

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 room 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 said 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,” Glasgow said of the tax.

5 replies on “Hoteliers urged to speak publicly about new room tax”

  1. There are afraid Mr Friday a lot of ?cry baby’s they have bin sent to the corner of the room by Junior.

  2. I share their pain, but Dr Friday, what is the alternative? Had the government hiked the VAT at least 2 %, the public would have called for the government to step aside. The fact is, the money has to come from somewhere, full time we take these matters into consideration. This issue can be adjusted, all we need to do, is take a deep breath, and move forward collectively.

    1. Observer the real point is the ULP government have so badly managed the country that there are no jobs, less tourists, an airport that lacks trafic, over taxation on imports causing sky rocketing of food prices. No new industry and the old is ailing. Most of the money collected by the sale of lands given to the Cubans.

      If they had been successful we could have a 10% VAT and on much less items, including salt.

  3. I am the owner of Bequia Beach Hotel, probably one of the biggest, if not the biggest, with regards to number of rooms, hotel in St Vincent & 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 demolished.

    The hotels in St Vincent consists 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% or even 40% or 30%. Average yearly occupancy rate in hotels in nearby Caribbean countries I believe raging between 60-70%. 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 traveller 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% 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 spend up to 40 times more in the local economy than a visiting cruise ship passenger! The Government shall therefore promote the existing hotels as well as promoting new hotels to be built.

    Overseas guests can chose among a number of destinations around the world, which at first glance presents better value for money than St Vincent & Grenadines.

    My strong view is the Government of St Vincent & Grenadines shall do everything in promoting and simplifying for their chosen way forward for the country – sustainable tourism. They shall 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 wrong way to go.

    Since I started my various investments in SVG, some 12 years ago, direct 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 suggested new room tax of XCD 8 per room/night, whilst our tourism industry standards have not vastly improved I can not see justification for further charges to be implemented. All this also create much extra administration for the operators, which also cost money and takes time which could be used for promote and to enhance their business. 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 will revise their strategy and find some other way to take out this increased tax or look how to reduce spending.

  4. It would be nice to hear the view of Flora Gunne she has been a good ULP supporter for years and they have now given her as well as the rest of our hoteliers the shake down. Its not a tax on the toursit because they cannot pass it on its another tax on the hotels.

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