The Adrian Loveridge Column – Level Playing Field Required to Encourage Greater Sector Investment
Sometimes it is fascinating how numbers can be used to create what at best is a false impression and at worse what can simply be described as ‘fake news’.
In one media report a Government spokesperson is boasting of the increase one property on the South coast has made to recent arrival numbers. The fact that seems to be lost is that this hotel currently has just 280 rooms, the exact same number that both of the previous operators managed. Even achieving at year round average occupancy level of 85 per cent that remains a maximum of 25,636 guests based on two persons per room and an overall 7 night stay, whoever is operating the hotel.
To achieve this re-branding, Government extended extraordinary unilateral tax concessions previously unknown on Barbados and despite all the rhetoric these are still not available in the identical format to any other organisation, anywhere!
Yes when additional rooms under construction are completed and online ready for occupation, this could and probably will make a positive difference to arrival numbers and attracting additional airlift.
Then go to another section of the media and, if the reporting is accurate, where on a recent visit by the Public Policy Head in Latin America and the Caribbean for Airbnb, Shawn Sullivan, stated that that company accommodated some ‘16,000 visitors’ on Barbados last year which represented around 2 per cent of all long stay arrivals. He also said that there were around ‘1,100 Barbadian homeowners’ Airnb host properties on Barbados, so it is logical to conclude that this amounts to far more actual rooms than the single property previously mentioned.
So what is the difference? Well first of all the taxpayer and I suspect our current administration is not privy to the audited accounts of the branded south coast hotel and has no idea what proportion of its revenue actually comes to Barbados at all. As the vast majority of its consumables are imported free of taxes and duties, this again is an unknown local benefit.
To be fair Government also has little or no evidence of the net financial contribution that the eleven hundred plus Airbnb lodging options make to the economy, but there is a massive disparity.
Almost without exception the Airbnb properties would not have benefitted from any tax concessions due to the scale of their average size and number of rooms. This makes most, if not all of them in-eligible for duty free local or imported items necessary for their operation.
Therefore it is perfectly reasonable to conclude that more of the Airbnb earnings are spent locally and that Government obtains and retains a higher level of fiscal benefit in proportion to their turnover.
As a three decade operator of a small hotel, I am not advocating for a millisecond that Airbnb and similar accommodation offerings are given the same unique preferential concessions as granted to the single hotel in Christ Church.
But if there is ever going to be anything close to a level playing field to encourage greater sector investment, so that we as a country can maximise our tourism earning potential, this situation has to be addressed.