Government granted more concessions on alcoholic beverages to hoteliers last year than on any other product, according to Parliamentary Secretary in the Ministry of Tourism Senator Irene Sandiford-Garner.
The Government senator told the Upper Chamber alcohol attracted 65 per cent of the $7.7 million in concessions granted to 43 hoteliers last year, lower than the previous year when these beverages accounted for nearly 80 per cent of the tax breaks.
“The duties on alcoholic beverages represented 65 per cent of all the concessions given in 2017 and 78 per cent in 2016,” Sandiford-Garner said today as she joined the debate on the Appropriation Bill 2018.
She said the $7.7 million in tax allowances granted to the sector was about $1 million more than in 2016, explaining that these hotels spent $17.2 million which qualified for food and beverage concessions.
“These concessions ranged from meat to [a range of alcoholic beverages] and whatever products they need for the infrastructure, whether it be tiles for hotel properties. This resulted in an estimated $7.7 million in concessions to the industry via the amended TDA [Tourism Development Act],” Sandiford-Garner said, adding that there was a modest increase in the number of applications for concessions, from the 2,239 in 2016 to 2,763 last year.
“These concessions are not only granted to international brands or overseas investors, but these concessions are granted to local hoteliers as well, and local hoteliers have taken good advantage of these concessions,” the Democratic Labour Party candidate for St Andrew explained, while stressing that in order for hoteliers to qualify for the tax breaks they had to ensure their Value Added Tax payments and National Insurance Scheme contributions were up to date.
“It should be noted that 43 hotels qualified for the concessions at this time out of the approximately 48 hotels, which would suggest that the concessions granted should be relatively stable moving forward,” Sandiford-Garner added.
The Government senator also revealed that there was a 70 per cent jump in the purchase of protein products, which accounted for over 50 per cent of total hotel purchases last year.
Following the granting of extensive concessions to the international hotel chain, Sandals, which began operations here in 2013 at the former Almond Casuarina Hotel in Dover, Christ Church, a number of local hoteliers and industry officials had complained bitterly that they were being placed at a disadvantage.
However, Sandiford-Garner said any concessions given to anyone in industry should be seen as an investment since it was considered an export industry.
“The Government is not giving away anything because you invest in a revenue generating enterprise. It is just like you invest in your business. You give away something to get something but it is really an investment,” she said, adding that the sector also provided thousands of jobs.
“There is a spin-off effect from this tourism industry . . . .So I hope that this clears up any of the misconceptions that we have as it pertains to concessions given to the tourism industry and this negative implication that we are giving freebies to people to come here to invest because we are desperate for investment. We welcome investment but we view the investment as a contribution to our domestic economy,” Sandiford-Garner said.
The Sandals chain, which was granted a 25-year tax break, has invested more than $400 million in the local economy into two properties since it first opened in 2015, hiring just over 1,000 Barbadians.
Officials of the hotel chain have also revealed that an estimated 1,800 new permanent jobs and an investment of US$400 million would come to Barbados with the completion of the promised Beaches Resort, its chairman, Gordon Butch Stewart has said.
The Barbados Hotel and Tourism Association had reported last year that more than $30 million would have been spent in 2017 on refurbishment and upgrade of hotels to help improve their competitiveness.