by Marlon Madden
Officials of the Barbados Hotel and Tourism Association (BHTA) remain hopeful that Government will come to their rescue by reviewing the controversial Garbage and Sewage Contribution (GSC) levy and broaden the access to concession to include tourism enterprises other than hotels.
BHTA officials argue that as the dreaded COVID-19 pandemic continues to take a toll on tourism-related businesses, it is necessary for them to get whatever help is necessary in order to keep their doors open and remain competitive.
In addition to improvements in the implementation and administration of the concessions under the Tourism Development Act (TDA) and the Tourism Development (Amendment) Act (TDAA), BHTA officials have argued that the duty-free access needed to be expanded to include stand-alone restaurants and other tourism-related businesses.
Chairman of the BHTA Renee Coppin said the current administration of the concession to those entities that are able to access them was simply too onerous. She suggested that there be a change in approach.
“We have had discussions around how do we improve it so that it is less onerous on our members when they have to apply for duty-free concessions. Right now, we work with a list of things which we are allowed to bring in duty-free.
What we are proposing to do instead is to move to a ‘negative list’ where most things that would be operationally necessary for us to operate our businesses are provided for duty-free access and then there are certain things that are produced locally or may cause risk to local producers or suppliers, that those things would be on the negative list,” she explained.
She noted that the BHTA already had a memorandum of understanding in place with the Barbados Agricultural Society (BAS) and the Barbados Manufacturers’ Association (BMA) that would allow for hotels and other tourism-related businesses to source certain items locally.
“But of course, we need to ensure that we are able to bring in the things we need to have to keep our industry competitive,” said Coppin. “One of the challenges we also have with the Act is that it speaks to a number of years within which certain things can be replaced or purchased again.
So for example, one year, three year or five year increments, based on what you are purchasing, and that creates an impediment to us in terms of refreshing our product,” she said. Coppin said in an effort to offer more competitive prices, industry operators across the board needed to be able to access the concessions.
“If we are not able at the basic level to be competitive with our competitor destinations in this region then we are already starting at a disadvantage,” she said.
Meanwhile, Chief Executive Officer of the BHTA Rudy Grant explained that restaurants that are not part of a hotel were still being excluded from accessing concessions under the TDAA despite them being tourism-related.
“We think that the TDA, as amended, needs to be expanded to allow other tourism enterprises to participate. You have a situation where stand-alone restaurants don’t benefit from the concessions . . We believe there needs to be an expansion of the number of tourism enterprises that are able to benefit,” he said.
“We have car rental operators, during this pandemic period our car rental members tell us that between 80 per cent and 90 per cent of their business is from visitors, and they have had a situation where they have had to sell vehicles in order to keep their businesses going. Having the right type of vehicles is also part of the overall experience that persons have and we believe that it is important to have other tourism enterprises to benefit,” said Grant.
He said when examined, the approximately $7 million worth of concessions given to participating restaurants per year was nothing compared to the benefits the country was getting from those businesses. Grant argued that being able to access the concessions would allow the sector to improve its foreign exchange earning potential and employment capacity as well as spend more.
In relation to the GSC levy, which was set at 50 per cent of the water bill of businesses in 2018, hoteliers have been lobbying for a review, with industry officials indicating at the time that some of them would end up paying as much as $60,000 per month on water bills.
Since 2019, hoteliers have been calling for a review of the onerous fee, and in June of that year, Prime Minister Mia Mottley told a BHTA general meeting that a review would be forthcoming.
“We will await the first three months of bills from the tourism sector and industrial sector – those who use a large amount of water – to be able to set, if necessary, an appropriate cap as we have done with land tax in this country,” Mottley said then.
However, Coppin told Today’s BUSINESS no progress has yet been made in this area. “We are still to have those discussions. We haven’t had those discussions yet, but our Minister [of Tourism Lisa Cummins] has committed that once she is available, she is going to have those discussions with us. So it is an ongoing process,” said Coppin.
In mid-2019 then Minister of Water Resources Wilfred Abrahams had promised that Government was looking to “cap the GSC for commercial enterprises which use a lot of water”, which would include hotels.
However, in her Budget presentation last month, Prime Minister Mottley announced that effective May 1, 2022, there will be a fixed rate of $1.80 per cubic metre (220 gallons) for water used in the agriculture sector.
marlonmadden@barbadostoday.bb
