The hotel sector in Barbados is facing a shutdown, resulting in an estimated 13,000 employees going home.
Executive vice-president of the Barbados Hotel & Tourism Association, Sue Springer, warned this morning that such would happen if Government failed to grant to the rest
of the industry the same list of tax concessions it has given
Surrounded by nearly a dozen hotel bosses, Springer told a news conference at the BHTA’s Belleville, St Michael office this morning that the sector would not be able to survive much longer on what she described as an uneven playing field. She said it would be impossible for the other hotels, particularly the ten other all-inclusive properties, small hotels and restaurants, to compete with Sandals, which already has greater economies of scale. She told reporters the key area of concern was the food, beverage and alcohol tax concession which Sandals was granted.
The BHTA executive vice-president noted that Sandals, which recently acquired Almond Casuarina and will manage Almond Beach Village, was granted this relief for which the association had been lobbying for several years now.
“The list of duty-free concessions in the second schedule of the TDA [Tourism Development Act], which was updated as of August 5, 2013, and a further amendment is to be made to this schedule, which will essentially allow every hotel to get what it needs within reason, to stay competitive,” pointed out Springer.
“The BHTA,” she continued, “is currently in discussion with the Minister of Tourism regarding this amendment, together with the updating of the core of the act. Provided the additional items are added in a timely manner, this will assist all aspects of the industry – not only hotels, but villas, restaurants and attractions.”
She noted, too, that the association was awaiting a response to a request for a meeting with the minister to discuss the food and beverage tax relief in particular. The hotel spokesperson also expressed concern that the ten all inclusive properties in the island would not be able to qualify for that concession which Minister of Tourism Richard Sealy announced in the House of Assembly on October 22.
The food and beverage concession was offered, with immediate effect to all investments of $500 million or greater.
“But what about the all inclusive properties that are currently operational and are not valued at over $500 million? How can they compete on such an unfair playing field? How can they go to the market with comparable prices for rooms and packages? How can they survive when one player is taking the market share of no less than 130,000 additional visitors with preferential concessions,” she declared.
“It is interesting to note that to date, SRI [Sandals Resort International], has only invested $100 million to purchase Casuarina Resort. The $500 million that is required to purchase and develop Almond Beach Village is technically money that is being sourced by Government, and ultimately it’s the taxpayers of Barbados that will be paying for this development initially and not SRI.”
Some of the hoteliers who attended the news conference agreed that the local tourism-related projects now in abeyance, could be resumed or started, if they got the same concessions of Sandals, particularly in food and beverage.