The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Total stopover visitors to the Bahamas have fallen by 11 per cent during a period when the Government’s tax take from the hotel/tourism industry has risen by $264 million.

These statistics were revealed in a presentation given by the Bahamas Hotel & Tourism Association (BHTA) to its members on April 3, which detailed the boost to government revenues from the 2010-2011 departure and room tax increases implemented by the former Ingraham administration.

When it came to the collective departure taxes paid by stopover and cruise visitors, the BHTA presentation showed that the Government’s revenue take from this line item had jumped by almost $46 million - from $68.9 million in the 2009-2010 fiscal year to $114.5 million in 2012-2013.

That represents a 66.2 per cent increase upon the Government’s departure tax take prior to when air departure tax rates rose from $15 to today’s $25, and cruise departure levies increased form $7-$8 to $13-$14.

As for room taxes, which were increased from 6 per cent to 10 per cent under the former Prime Minister, the Government’s revenue take had risen by $19 million annually - from $25.1 million in 2009-2010 to $45.1 million in 2012-2013.

This represents a 79.7 per cent increase upon the pre-increase revenue take. And, with some $40.9 million and $43.3 million generated in room tax revenues for 2010-2011 and 2011-2012 respectively, the BHTA presentation suggested that the rate increase had produced $53 million in extra monies for the Government over three years.

And, with the new departure taxes providing $102.5 million and $101.6 million in 2010-2011 and 2011-2012 respectively, the BHTA said that when the three post-increase years were combined, the Government had gained an extra $211 million from this measure.

The extent of the combined $264 million extra revenues from just these two tax measures will raise further questions about whether the Government’s fiscal woes stem from runaway spending, rather than inadequate revenues.

The BHTA presentation, though, was quick to point out that higher-yielding stopover arrivals to the Bahamas had dropped progressively in the period between 2007 and 2011 - from 1.528 million persons to 1.363 million in 2013.

This represented an 11 per cent decline, with raw stopover numbers falling in each year. Over the same period in the Caribbean, only Barbados saw a similar decline in stopover arrivals, with lower cost rivals experiencing “a dramatic increase”.

Among them, Cuba saw a 32 per cent increase between 2007 and 2013, with Aruba up 27 per cent; the Dominican Republic up 17 per cent; Jamaica up 18 per cent; and Puerto Rico ahead 16 per cent.

And the BHTA said in an e-mail to members yesterday that Bahamian room rates were “among the highest in the region”.

They were said to be “more than twice the Dominican Republic” and “over 60 per cent higher than Jamaica and Cancun”.

Data produced for its recent presentation showed that only Barbados and the US Virgin Islands were higher than this nation’s average $264.28 rate for 2013, while the Bahamas also had the lowest regional occupancy rate of 58.6 per cent.

All this, the BHTA indicated, was impacting the hotel and tourism industry’s competitiveness and resulting in a reduction of stopover customers in the Bahamas’s largest industry and private sector employer.

And there appears to be no escape from the tax man. The BHTA indicated that the Business Licence fee increases announced in the 2013-2014 Budget would extract an extra $15 million in revenues from the hotel industry this fiscal year, with the tax increasing by 50 per cent and 250 per cent for small and large resorts, respectively.