Submitted by Adrian Loveridge
Yet again, it’s the hotels and to a lesser extent the ancillary tourism services that are being asked to discount their rates either directly or through another form of discounting, often to referred to as ‘added value’, while at the same time maintain employment. But free room nights, free breakfast, half price this and half price that, all have their cost.
Yes! We all understand the devastating effect lower long stay visitor arrivals and occupancy will have on employment and business viability. But unlike the merchants who simply pass on increased costs, the hotels contract rates that are often fixed for many months, if not years, in advance.
The Government has recognised the important of stepping up marketing and promotional activity in these troubling times, but is there more they can do? I believe they can, and must do if we are not going to see further hotel closures next summer. Grantley Adams Airport now has the highest departure and other taxes in the region. I realise that the airport is now operated by a company. But it is a wholly owned Government company.
Secondly, the Government of Barbados is one of, if not the single largest shareholder in LIAT (1974) Ltd. Despite the fall of around in 70% in fuel costs, LIAT has made only one token fuel surcharge cut of US$2.50 per sector flown. There is still a massive US$23.75 fuel and insurance surcharge on each segment flown.
Yet airlines and cruise ship operators around the world have significantly lowered or eliminated fuel surcharges altogether. Again, while the medium to long goal is to reduce LIAT’s dependency on the Caribbean taxpayer, it should not be at the cost of our tourism industry. After, all those taxpayer’s hand-outs have been largely generated by this sector.
The Caribbean is currently our (Barbados) third most important source market for long stay arrivals and perhaps one that will be more resilient than others. So if unreasonably high departure taxes and fuel surcharges are a deterrent to people travelling within the region, especially in the softer summer months, Government will not collect tax or VAT on accommodation, dining experiences, car rental, attractions and activities etc.
Lower employment in the industry will also add to depleted tax and national insurance revenue collection.
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