Prime Min­is­ter of An­tigua and Bar­bu­da Gas­ton Browne is ad­vis­ing that the time has come for a re-eval­u­a­tion and re­align­ment of ho­tel con­ces­sions in the Caribbean to ar­rive at a more eq­ui­table and sus­tain­able in­cen­tive regime that is fair and eq­ui­table to all stake­hold­ers.

His com­ments came in wake of a state­ment is­sued last week by the Caribbean Ho­tel and Tourism As­so­ci­a­tion (CHTA), which warned that the re­moval of long-stand­ing tax in­cen­tives could neg­a­tive­ly im­pact tourism’s con­tri­bu­tion to the Caribbean’s eco­nom­ic de­vel­op­ment, em­ploy­ment and tax rev­enues.

Tax in­cen­tives in the re­gion are meant to en­cour­age in­vest­ment in ho­tels and gen­er­al­ly take the form of tax hol­i­days, tax equal­i­ty and tax sta­bil­i­ty as well as im­port du­ty con­ces­sions and tax al­lowances.

These in­cen­tives, the CHTA ex­plained, help off­set the re­gion’s high op­er­at­ing costs and at­tract vi­tal busi­ness in­vest­ment.

Ac­knowl­edg­ing the fis­cal chal­lenges Caribbean gov­ern­ments face post-COVID-19, the or­gan­i­sa­tion em­pha­sised pub­lic in­fra­struc­ture, health­care and so­cial ser­vices are crit­i­cal for cit­i­zens and the suc­cess of tourism.

It re­it­er­at­ed that while in­vest­ments in in­fra­struc­ture sup­port a sta­ble en­vi­ron­ment for both res­i­dents and vis­i­tors, re­mov­ing tourism tax in­cen­tives with­out of­fer­ing al­ter­na­tives risks stalling growth, re­duc­ing com­pet­i­tive­ness and lim­it­ing job cre­ation.

How­ev­er, Browne, in a What­sApp mes­sage to the Sun­day Busi­ness Guardian, ad­vised, “We have gone be­yond the days of plan­ta­tion economies with the phi­los­o­phy of ‘in­dus­tri­al­i­sa­tion by in­vi­ta­tion’ with over­ly gen­er­ous con­ces­sions and heav­i­ly sub­sidised, or free, prime re­al es­tate.

“Ho­tels, as sig­nif­i­cant rev­enue earn­ers must now serve the de­vel­op­men­tal needs of Caribbean coun­tries, by con­tribut­ing their fair share of tax­es and to pro­vide lu­cra­tive com­pen­sa­tion pack­ages for their em­ploy­ees, so that they can en­joy good liv­ing stan­dards.”

Not­ing that An­tigua and Bar­bu­da has had its best tourism year in 2024, Browne said the coun­try has at­tract­ed more tourism in­vest­ment on a per capi­ta ba­sis than any oth­er Caribbean coun­try.

“Our tourism in­cen­tives rank among the best in the Caribbean in­clud­ing up to 25 years cor­po­rate tax re­lief, du­ty and tax waivers on all build­ing ma­te­r­i­al, fix­tures, fit­tings, fur­nish­ings for new builds and sig­nif­i­cant im­prove­ments,” he added.

Ho­tel own­ers and op­er­a­tors alone, Browne said, do not make a suc­cess­ful hos­pi­tal­i­ty in­dus­try, say­ing that all stake­hold­ers must ben­e­fit eq­ui­tably.

At a press con­fer­ence in Ju­ly this year, An­tigua and Bar­bu­da’s Min­is­ter of Tourism, Max Fer­nan­dez re­port­ed a sig­nif­i­cant in­crease in that coun­try’s tourism for the first half of 2024, with stop-over vis­i­tors reach­ing 176,665, a 15 per cent rise com­pared to the same pe­ri­od last year.

“Stopover vis­i­tor ar­rivals in­creased from Jan­u­ary to June 2024, from 154,333 in Jan­u­ary to June 2023 to 176,655 in Jan­u­ary to June 2024, when com­par­ing the same pe­ri­od in 2019, which was our best year. This rep­re­sents a ten per cent plus in­crease from 161,434 at the end of June of that year. We are well on the way to a record year for tourism ar­rivals,” he stat­ed.

Mean­while, T&T’s Min­is­ter of Tourism, Cul­ture and the Arts, Ran­dall Mitchell, who al­so spoke to the Sun­day Busi­ness Guardian as­sured that the T&T Gov­ern­ment con­tin­ues to of­fer an en­abling, fa­cil­i­ta­tive, and com­pet­i­tive in­vest­ment en­vi­ron­ment for tourism in­vest­ment.

He said the cur­rent tax regime, and the in­cen­tives of­fered to tourism in­vest­ment, is re­flec­tive of Gov­ern­ment’s recog­ni­tion of the im­por­tance of the tourism sec­tor to job cre­ation, for­eign ex­change earn­ings, tax rev­enues and eco­nom­ic growth.

With re­spect to T&T’s in­vest­ment en­vi­ron­ment, Mitchell said its tourism sec­tor of­fers the fol­low­ing in­cen­tives for ap­proved tourism projects (which in­clude trans­porta­tion: the pur­chase of taxis and bus­es, ac­com­mo­da­tion prop­er­ties, mari­nas, boat yards, golf cours­es, dive op­er­a­tions, wa­ter sports tour op­er­a­tions etc):

1. Ex­emp­tion from cor­po­ra­tion tax/in­come tax for a pe­ri­od up to sev­en years with the pos­si­bil­i­ty of an ex­ten­sion of that pe­ri­od;

2. Tax ex­emp­tions from the prof­its or gains from the sale of vil­las and/or con­do­mini­ums in an ap­proved in­te­grat­ed re­sort de­vel­op­ment;

3. Ac­cel­er­at­ed de­pre­ci­a­tion of de­pre­cia­ble equip­ment owned by the own­er or op­er­a­tor and used in an ap­proved tourism project;

4. A cap­i­tal al­lowance in re­spect of ap­proved cap­i­tal ex­pen­di­ture in­curred by the own­er or op­er­a­tor in the cre­ation of a new tourism project or the ex­pan­sion of an ex­ist­ing tourism project;

5. A car­ry-over from a tax ex­emp­tion pe­ri­od, if any, of any loss aris­ing out of the op­er­a­tion or rent­ing of an ap­proved tourism project;

6. Ex­emp­tion from tax­es on the im­por­ta­tion of ve­hi­cles for ap­proved tourism op­er­a­tors; and

7. Ex­emp­tion from cus­tom and ex­cise du­ties on the im­por­ta­tion of ar­ti­cles for use in ap­proved tourism projects.

In ad­di­tion, the tourism min­is­ter not­ed that Gov­ern­ment re­duced the rate of Val­ue Added Tax to from 15 per cent to 12.5 per cent in  fis­cal year 2016 and pro­vid­ed an in­crease in in­come tax al­lowances for peo­ple earn­ing un­der $90,000 an­nu­al­ly or $7,500 per month.

Fur­ther, Mitchell said Gov­ern­ment al­so pro­vides non-leg­is­lat­ed in­cen­tives in the form of the Tourism Ac­com­mo­da­tion Up­grade Pro­gramme where par­tic­i­pants re­ceived a re­im­bursable grant of up to 50 per cent for cap­i­tal im­prove­ments to ac­com­mo­da­tion prop­er­ties, and a Gov­ern­ment loan guar­an­tee pro­gramme for tourism projects in To­ba­go through the T&T Tourism Busi­ness De­vel­op­ment Com­pa­ny up to a max­i­mum of $10 mil­lion.

“Trinidad and To­ba­go con­tin­ues to of­fer a com­pet­i­tive in­vest­ment cli­mate, and there is no pol­i­cy at this time to make our in­vest­ment cli­mate any less at­trac­tive,” Mitchell added.

The 2024 Re­view of the Econ­o­my not­ed that this coun­try’s tourism sec­tor’s con­tin­ued re­cov­ery in 2024, which is sup­port­ed by in­creased ar­rivals across all ma­jor seg­ments, re­flect­ing suc­cess­ful post-pan­dem­ic re­vi­tal­i­sa­tion ef­forts. The doc­u­ment added that growth in air­line and cruise ship ar­rivals, along with resur­gent Car­ni­val ar­rivals, sup­ports a pos­i­tive out­look as the sec­tor con­tin­ues to re­gain its glob­al mar­ket pres­ence.

It fur­ther not­ed that dur­ing the five-month pe­ri­od Jan­u­ary to May 2024, T&T record­ed air pas­sen­ger ar­rivals of 138,670 per­sons, a 7.3 per cent rise com­pared to the 129,229 air ar­rivals dur­ing the cor­re­spond­ing pe­ri­od in 2023.

Specif­i­cal­ly, Trinidad record­ed a 7.9 per cent in­crease in air pas­sen­ger ar­rivals, rep­re­sent­ing 131,535 peo­ple; up from 121,875 peo­ple re­ceived in the pre­vi­ous com­par­a­tive pe­ri­od.

In con­trast, To­ba­go re­port­ed 7,135 air pas­sen­ger ar­rivals, mark­ing a three per cent de­cline from the pre­vi­ous pe­ri­od.

Leisure and recre­ation (47.7 per cent); vis­it­ing friends and rel­a­tives (29.7 per cent); and busi­ness or work 67 (14.6 per cent) were iden­ti­fied as the pri­ma­ry rea­sons for vis­it­ing T&T dur­ing the five-month pe­ri­od.

Ac­cord­ing to the most re­cent avail­able da­ta from the CSO, T&T wel­comed 28,700 vis­i­tors dur­ing the 2024 Car­ni­val pe­ri­od; a 4.8 per cent in­crease over the pre­vi­ous year. Al­though the av­er­age ex­pen­di­ture per vis­i­tor dipped slight­ly to TT$14,403, from TT$15,313 in the pre­vi­ous Car­ni­val pe­ri­od, it re­mained well above pre-pan­dem­ic lev­els, which av­er­aged TT$10,154 be­tween 2018 and 2019.

The 2024 Re­view of the Econ­o­my fur­ther stat­ed that in cal­en­dar 2023, the av­er­age oc­cu­pan­cy rate in Trinidad rose to 52.2 per cent, from 43.2 per cent in the pre­vi­ous year.

To­ba­go al­so reg­is­tered growth in room oc­cu­pan­cy rates from 34.6 per cent in 2022, to 38.1 per cent in 2023.

In Au­gust, both is­lands achieved peak room oc­cu­pan­cy rates, with Trinidad re­port­ing 66.8 per cent and To­ba­go 47.0 per cent.

As it re­lates to tax in­cen­tives in the Do­mini­can Re­pub­lic Sanovnik Destang, pres­i­dent of CHTA ex­plained that its tourism de­vel­op­ment has been dri­ven by the Con­fo­tur tax in­cen­tives law.

He not­ed, from 2013 to 2023, in­vest­ment in that coun­try’s tourism sec­tor grew 361 per cent; in 2022, 19 per cent of the DR’s GDP was pro­duced or in­duced by tourism.

“Clear­ly, these in­cen­tives have helped stim­u­late growth and de­vel­op­ment of the sec­tor. Re­moval of in­cen­tives with­out a re­place­ment leg­is­la­tion will sti­fle growth and de­vel­op­ment and in­vest­ment from both for­eign and lo­cal in­vestors,” he added.