High taxation hurting regional tourism
Undue hardships risk losing Caribbean visitors to other destinations.
SAN JUAN, Puerto Rico, Wednesday May 02, 2012 – Caribbean governments have been taken to task for their increasing “appetite for taxation of the tourism industry” which is eating into the sector’s earnings.
President of the Caribbean Hotel and Tourism Association (CHTA) Josef Forstmayr has accordingly urged countries in the region to overhaul their tax policies or risk losing visitors to other destinations.
Forstmayr addressed the undue hardships being imposed on the industry at the 16th annual Caribbean Hotel and Tourism Investment Conference (CHTIC) held recently at the Sheraton Puerto Rico Convention Centre.
Far from responding positively to previous concerns expressed by tourism players, Forstmayr, who is Managing Director of the Round Hill Hotel and Villas in Jamaica, said government taxation has “continued to increase unabated”.
“We hear of new policies that tax not only the private sector but also our visitors directly. These masquerade under such names as airport improvement taxes, tourism enhancement fees and, by far the worst of all, the dreaded UK’s Airline Passenger Duty (APD),” he said.
“Increased taxation is regressive. Our governments must make a serious effort to review their taxation policies on the tourism industry. It is time now to remove or at least reduce excessive consumption taxes on our visitors, not to increase them.
“It is also time to rethink old policies which call for an increase of these taxes. Our industry is based on competitive pricing and our visitors will simply choose other destinations which may provide better value,” Forstmayr added.
The hotelier also called for meaningful tax incentives to attract the investment that is needed for the Caribbean to maintain its appeal and competitiveness as a world-class destination.
Forstmayr added that failure to ease the tax burden on the industry will not only result in less revenue for the hotel and tourism sector, but will negatively affect the wider economy due to tourism’s links to domestic manufacturing and agriculture.
The CHTA head stressed that travel and tourism is the region’s most vital export and the fastest way to create jobs and grow the economy.
He said the sector’s contribution is highlighted in a recent study by the Jamaica Hotel and Tourism Association on travel and tourism as a driver of economic development in that island, and the CHTA will be working with consultants Tourism Economics to develop a similar study for the entire region.