HAMILTON, Bermuda – Director General of the Caribbean Hotel and Tourism Association (CHTA), Alec Sanguinetti, today said that the industry is having its worst period in its history due to the ongoing global financial crisis and government taxation policies.
“The industry I would say is threatened and unfortunately because of the contracting of government revenues because of the downturn in tourism (and) tourism has become the bulls eye for taxation,” Sanguinetti told the Caribbean Media Corporation (CMC).
“We have seen an increase in taxes on room nights, we have seen an increase on air tickets, we now have one or two governments who are looking at putting taxes on service charges. We need to get some relief,” he said.
Sanguinetti said that there was need now for greater collaboration between the regional private and public sectors.
“But we need to re-tool our industry. There are things that are within our control to fix which we need to do and the longer those policy issues are ignored the more serious it will be not only for the hotel industry but for the entire industry.”
He added that the industry is already “half dead already” adding “there is not much more to kill.”
“It is very serious. You have to understand that the hotel revenue per room, the average daily rate compared to 2006 we are still down 15 to 20 per cent… and while the figures for 2010 will show an average between a three and five per cent increase over 2009, as I said they are still down 15 to 20 per cent to what they were in 2006.
Sanguinetti said while Britain had decided to hold its hand, at least for a year, in increasing the Air Passenger Duty (APD), it was vitally important that the region continue to protest the tax which he described as being detrimental to the entire sector.
“There is no doubt that the APD is detrimental to the industry we have seen signs of that already both to land based tourism and in 2012, the cruise lines have recognised the potential impact and we have seen some cruise lines have announced for 2012 the re-position of ships out of the Caribbean which is going to impact, particularly the south eastern Caribbean.
“There is no doubt APD is going to have a negative impact on us,” he said, noting the Caribbean was the only region in the world that presented London with proposals outlining the impact the tax would have on regional destinations.
APD has increased every year in line with inflation since 2007 and is already up to 8.5 times more than the European average.
Before November last year, each economy class traveller to the Caribbean paid £50 (US$77) in APD, but that tax was increased to £75 (US $115) – the second in as many years. The levy for premium economy, business and first class passengers rose from £100 (US$154) to £150 (US$291).