The Adrian Loveridge Column – Anticipating the Impact of Additional Taxes on the Tourism Sector
[Barbados Underground] It is now a full month since the new Government imposed the mandatory room levy that our cherished guests have been asked to pay. How effective has the additional tax collection been and will we ever know what sort of overall revenue has been successfully collected?
Or how many the yet unregistered accommodation providers have so far evaded their legal duty by failing to account for and deposit these payments to the Barbados Revenue Authority?
What enforcement mechanisms have already or are planned to be put in place by the administration and how will they deter more property owners collecting payment offshore and avoiding due taxes altogether?
Like many perhaps, we have been watching prices on several products, expecting at least to fall after the removal of the almost obscenely called National Social Responsibility Levy. YES! We understand there are existing stocks to sell, but not in a single occasion have we experienced any reduction so far. In fact with many items, 10 per cent or more has been added to previously paid costs in May and early June.
Our response has been largely to avoid buying at these inflated prices, especially if at this time, they are considered non-essential.
Many observers out there may be under the illusion that a substantial percentage of our cherished visitors will not shop around to find how they can obtain a similar product at a price they have paid in the past and at least attempt to maintain the standard of a previous holiday here.
In many ways holidays or vacations are no different to other commodities and it is inevitable that the majority, especially those in the lower budget range will shop around. Just study what is going on with the battle between Walmart and Amazon at the moment. The giant box retailer, Walmart is ‘investing’ millions of Dollars into prime-time television commercials to hopefully remind shoppers that they can go online, order and have products delivered to their door at no cost, from them as well.
Our tourism planners and policymakers should not forget this, if they wish to safeguard the envious and diverse airlift that has been built up over the last few years.
Our UK market is probably the most sensitive at the moment with the continued uncertainly of Brexit, the fall in the value of Sterling, higher that forecasted inflation and rising mortgage costs, all play into the amount of disposable income for holidays.
Compound this with a staggering (even if necessary) increase in the cost or travelling to, staying in and patronising our various tourism offerings and it’s almost a given that this market will be under severe pressure in the months to come.
We all have to look at creative ways to help mitigate the possible loss of arrival numbers and the potential effect that will have on any economic recovery.