The Tribune

The government is planning to overhaul the tax incentives offered to the cruise industry given that all existing deals bar one have expired, a cabinet minister has revealed.

Dionisio D'Aguilar, minister of tourism and aviation, told the House of Assembly during the recent budget debate: "The conundrum remains of how do we work to improve domestic production to facilitate increased cruise visitor spend?

"All but one of the cruise agreements have expired, and the government does not intend to continue the cruise incentive model that it has operated in the past." This model has involved departure tax rebates, where cruise lines are refunded a portion of these payments if they exceed certain passenger arrivals targets.

Some $15m is owed by the government to the cruise lines, and is one of the largest payments in the $172m of "unfunded arrears" that it plans to clear during the 2018-2019 fiscal year.

Mr D'Aguilar said that while The Bahamas experienced a marginal loss in growth of its cruise business during the 2018 first quarter, "we experienced overall growth last year in the volume of cruise passengers when the region experienced a 3.7 percent decline".

He added that The Bahamas' tourism industry performed "exceptionally well" during the first three months of 2018, with stopover visitors increasing by 18 percent and air arrivals at their highest on record.

"This places The Bahamas in third place in the region, after Belize and the Cayman Islands, which recorded growth levels of 23 percent and 20 percent, respectively," said Mr D'Aguilar.

"It should be noted that, with The Bahamas receiving at least 1.4 million stopover visitors per annum, this growth is tremendous when compared with that of our Caribbean neighbours."

Mr D'Aguilar said air arrivals growth supported the 39 percent year-over-year increase in hotels' room revenue during the 2018 first quarter.