Local hoteliers say they still have not been able to draw down on any of the relief promised to them by Government with the amendment of the Tourism Development Act (TDA) last year.
In a statement issued today, the Barbados Hotel and Tourism Association (BHTA) reported that to date only a few hotels had been able to obtain the required document licensing them to import duty free and that none of the hotels or their restaurants had been able to receive even “one duty free item”.
The BHTA believes the process is taking too long. It also raised concern about the absence of a level playing field, while claiming that the Butch Stewart-led Sandals group managed to obtain its duty free status within three weeks of signing their contract with the Freundel Stuart administration.
Following is the full text of a statement issued today by the BHTA in which it revealed that the promised concessions were still not available to other hotels and restaurants.
“On October 21, 2014 the amendment to the TDA was passed in Parliament. These amendments would allow hotels to import food, beverage and consumables, which would put them on the same level playing field as that of Sandals Barbados Resort, which was due to open in January 2015.
The amendment to the Act was proclaimed in the Gazette dated November 10 and 17 2014, respectively. However, due to an issue with the Government Printers, the Gazettes proclaiming the Act was not actually printed and distributed until December 15, 2014.
The previous TDA was in effect during this time. However, there appeared to be a higher level of challenges in regards to the importation of goods by the hotels during the pre-season period.
A digital cloud based system was being set up to allow for the easy flow of requests for duty free food items and a pilot was suggested to ensure that all persons and entities involved would be familiar with the process.
Hotels were also requested to supply a full list of all food, beverage and consumables they utilise on an annual basis together with the quantities and where they were purchased – overseas or locally. On January 26, 2015, the BHTA received correspondence from the Hon. Richard Sealy, the Minister of Tourism and International Transport, informing that hotels could now make applications to import duty free food and beverage items.
It was agreed that only alcohol, beverages and meats from the food and beverage listing, would be imported for the first month, again, to ensure the system would work efficiently.
To date only a few hotels have been able to obtain the required document licensing them to import duty free and none of the hotels or their restaurants have been able to receive one duty free item.
Sandals Barbados managed to obtain its duty free status within three weeks of signing their contract.
Up until the end of January it could be said that there was an even playing field as Sandals was not actually operational however, this is NOT the case anymore. It is well publicised that Sandals is open and running full which seems to be the usual state of this particular property from its inception as Casuarina it ran full, then Almond, then Couples and now Sandals.
The BHTA again thanks the Government of Barbados and, by extension, Minister Sealy and Minister of Finance and Economic Affairs, Hon. Christopher Sinckler, for all their work towards the process to date. We also applaud Government for declaring the tourism sector an export industry and thus treating it as such with the assistance of removing the inbound rates for the items required to run the properties.
However, the process is taking a very long time and the perception is that the hotels have been receiving duty free relief on the additional items since last October, which is absolutely not the case.
Additionally, hotels certainly will not feel any positive effect of these reduced costs in this winter season and definitely not until after cricket in May.
A recent study showed that more than ever before local hotels were offering early booking discounts; value added packages and the like, to drive business in both the winter and summer months, as it was necessary for the island to be front-of-mind in the eyes of both the trade and the consumer.
The long stay arrivals figures being reported for the first two months of the year are definitely an improvement over the last few years, but it is imperative to retain this impetus and to ensure that this holds well for the remainder of the year and beyond.
It is also long overdue for the industry not to be judged on the number of arrivals but on the revenue earned from those arrivals.
There are also some questions which still need to be answered. For example – Has the heavy room rate discounting after 2008 receded? Has the yield per bed night increased to pre-2007 levels? Has the increase in visitor arrivals happening rapidly enough to return the industry to long term profitability?
It is hoped that this strong winter, the first in seven years, may now assist some of the hotels to be in the position to actually pay capital payments on their loans as many of them have only being paying interest for all of this period.
The tourism industry as a whole has the ability to make a significant contribution to the economy of Barbados both now and in the future however, the facilitation process for doing business for hotels, attractions, car rentals, restaurants, dive operators etc., must be improved to ensure that we can remain competitive in a very dynamic and flexible global market.”