It is early days yet, but the July 1 introduction of the room rate levy and the 2.5 per cent product development levy on direct tourism has not scared away tourists for the Crop Over season now in full swing, according to the organization that represents the interest of local hoteliers.
The Barbados Hotel and Tourism Association (BHTA) said information from key players in the sector suggested that business had remained steady despite the taxes announced by Prime Minister and Minister of Finance Mia Mottley last month.
“As far as some of the members have reported to us, there has been no drop off in accommodation and bookings and such like,” BHTA Chairman Stephen Austin revealed today while paying a courtesy call on Barbados TODAY at its Manor Lodge, St Michael headquarters.
“I think . . . people have come to a point where they know and accept that there is a levy,” he added.
Austin, the general manager of Port St Charles, cited the experience of the high-end west coast luxury resort, revealing that his clients were not deterred by the new taxes.
“Most people have paid it without even a question. Most people that are coming next year have said, ‘you know we
expected it, we pay it in
Europe and we pay it in other places, so we expected it. It probably took a little longer than we thought in being implemented’. It was actually quite surprising for us in our experience,” he said, though readily admitting Port St Charles was not a typical example.
Back on June 11, Mottley announced in her austerity Budget that as part of her three-part Barbados Economic Recovery and Transformation Plan, a levy of between US$2.50 and US$10 per room per night would be applied to all hotel rooms.
In addition, a 2.5 per cent product levy was imposed on all direct tourism services along with a ten per cent tax on shared accommodation.
Mottley projected that the room rate levy would raise $47 million, the product levy $3.9 million and shared accommodation $8 million.
Austin insisted it was not all doom and gloom in the sector and BHTA members were prepared to play their part to help restore the ailing economy.
“We had a meeting with some stakeholders and many people have been calling to find out how can we help, how can we pay, what can we pay and when, so they are very anxious to help,” the BHTA head said.
“I am encouraged by this. I think this is an opportunity for Barbadians as a people to come together and make this happen and the tourism sector and the hotel and tourism association are assisting.”
Meanwhile, the sector is bracing for the introduction of Government’s Garbage and Sewage Contribution (GSC) levy, which will take effect from August 1.
Hoteliers have complained that the GSC, which will require them to pay a levy equivalent to 50 per cent of their water bills, would send their bills soaring to as high as $60,000 a month.
At their annual general meeting last month, BHTA members had appealed to Mottley to rethink the measure.
Austin told Barbados TODAY the tax would proceed as announced with a possible review in three months.
“When we spoke at the last Social Partnership meeting the Prime Minister did indicate that we would start the tax collection first and then in two or three months look at possibilities or alterations.
“So we are encouraged by the fact that she has opened discussion on it and she has said that she will look at it in two or three months. There will be a tribunal or some sort of appeal process at the BWA [Barbados Water Authority], so for people that are under the threshold and who cannot really afford to pay it basically means that will be looked at as well. So I feel very positive that we will get some assistance from Government,” he said.