Government has identified 3,000 unregistered tourist accommodation units to be licensed, with Minister of Tourism and International Transport Minister Kerrie Symmonds conservatively estimating that once those entities are brought into the tax stream by October “we should be in a position in the first fiscal year to get $8 to $10 million into the coffers of Barbados”.
Contributing to the debate in the House of Assembly on the mini Budget presented by Prime Minister Mia Mottley on Monday in which a ten per cent tax on the homestay accommodation sector was announced, Symmonds noted that as far back as 2005 Barbados’ visitor-room accommodation has been increasing in non-traditional ways.
“We’re not seeing it in the hotel sector, but in the privately-owned entities which may be houses that put up a room, the villa market, multi-tier accommodation, condominiums,” he said, while explaining that occupancy was fuelled by a peer-to-peer network in which owners attract guests, through property managers, and as a result, “there is a significant in room inventory that are available for rent in Barbados for tourism purposes”.
The minister said that there were several networks operating in Barbados besides well-known brands such as Air BNB and HomeAway.
“These entities that constitute the so-called sharing economy . . . they do not own any lodging. They come here and do business here and they act essentially as brokers, receiving a percentage of the service fee. They are the intermediary that allows the guests in Europe or in the United States to come here to a host accommodation.
“Out of that has emerged a number of platforms which are called the ‘sharing economy’.”
The minister said, “we have identified up to this stage as many as 3,000 such entities. Many of those entities are not registered”, adding that they have been assessed to average US$336 per night room rate.
“That is comparable to some of the five-star [hotels] on the west coast of Barbados.
“Effectively, therefore, we have a substantive amount of business taking place which is not registered,” Symmonds said, adding that “we cannot allow entities of that nature to effectively dig a subterranean tunnel under the revenue of Barbados enroute to finding the bank that they do business with”.