Bahamas News

The Ministry of Tourism has decided not to pursue the reintroduction of taxes imposed on complimentary hotel rooms, Tourism Minister Obie Wilchcombe has announced, placating longstanding concerns about it among local hoteliers.

Minister Wilchcombe made the disclosure as he addressed the closing ceremony of the National Tourism Conference on Friday.

The ministry had been considering reintroducing the tax as the Ministry of Finance sought the assistance of the Department of Hotel Licensing in closing the leakages created by the underreporting of various hotel properties for room tax purposes.

“I should wish you to know that the Ministry of Tourism does not intend to pursue the re-introduction of the complimentary room tax,” the minister announced.

“I do intend however to expand the scope of responsibility to Hotel Licensing. Its expanded role will include closer monitoring of our properties aimed at reducing the level of complaints by our guests.”

The Bahamas Hotel Association had been arguing about the inherent unfairness of penalizing hotels for contributing to marketing and promotional efforts, which generate additional revenue for the public and private sectors, and for providing complimentary rooms for charity and other goodwill reasons.

It reasoned that the industry would have been far better served if the focus were placed on enforcement efforts directed at those properties that may be abusing the system rather than discouraging those operators who are committed to revenue producing activities.

BHA officials had pointed out that competing destinations do not assess taxes on complimentary rooms for marketing or goodwill.

Newly elected Bahamas Hotel Association (BHA) president Russell Miller had explained that if imposed, the tax on complimentary rooms would have likely had a profoundly negative impact on hotel operators.

“All of the hotels (would be affected) by this at some point during the course of the year,” he said.

“Some participate more than others so there would be a significant impact to the industry and the hotels do not agree with this and would not like to have that put in place.”

He said that in addition to having to cover the cost of the room rate itself the hotel would also have to add on a gratuity and room tax for the complimentary rooms.

The gratuity added on is a flat rate across the board for all BHA hotel properties and is calculated according to the industrial agreement between the BHA and the hotel union, Mr. Miller explained.

The decision against imposing the taxes was made after an evaluation of the idea’s feasibility and desirability taking into account the priorities and differing interests of various industry stakeholders.

According to the latest data released by the Ministry of Tourism, up to last September hotel room revenue exceeded $302 million, a 5.6 percentage hike over the same period the year before. The room revenue collected for the month of September alone was over $14 million, the data showed.

By Tameka Lundy
The Bahama Journal