Tourism Success at Risk: Higher Hotel Tax Could Drive Visitors Away

A vacation in Belize may soon come with a higher price tag, but tourism stakeholders fear visitors and local businesses will ultimately pay the price. They are pushing back against a proposed increase in the hotel accommodation tax, warning it could discourage travel, reduce spending and hurt an industry already grappling with rising costs. News Five’s Britney Gordon reports.

 

Britney Gordon, Reporting

A higher hotel tax could put a Belize vacation out of reach for some travelers. Tourism representatives fear government’s proposed increase will make the country more expensive at a time when visitors have plenty of competing destinations to choose from. Belize Hotel Association President Reynaldo Malik says the industry is performing strongly, but that advantage could quickly disappear.

 

Reynaldo Malik, President, Belize Hotel Association

“We’re not only faced with the costs and issues that we face here locally. Remember, our largest source market is the United States, and they are also going through an inflationary period as well. So their discretionary spend has diminished as well. So we’re fighting against Cancun, we’re fighting against Jamaica, we’re fighting against the Bahamas, the Dominican Republic, Costa Rica, El Salvador, now Panama. We’re fighting against all these other destinations for market share. And the first thing that will just basically melt our market share is if we become one of the most highly priced destinations in the region.”

 

Malik says the hotel industry is already struggling with rising costs and shrinking profit margins, making the proposed three-point-five percent tax increase especially burdensome. In Caye Caulker, hotel owners are already spending heavily to fight sargassum and keep their businesses running. Now, they could face another financial blow. Belize Hotel Association member Alina Saldivar, who owns Island Magic Beach Resort and Island Magic Villas, says the industry needs government support, not additional taxes.

 

On the Phone: Alina Saldivar, Owner, Island Magic Beach Resort & Island Magic Villas

“We feel good when the government shows the numbers that our industry contributes, but we struggle to do that without much support. I can confirm that, you know, we don’t get any, for example, assistance with import duties when I bring in sheets and towels. Right now all of us are buying ACs and TVs and refrigerators and faucets and door locks. Like if it’s the disposable paper towels that we’re buying due to the sargassum and the regular salt air deterioration.”

 

Saldivar says hotels are already battling higher food, fuel, electricity and labour costs. The UDP also opposes the tax hike, warning it could make Belize less competitive. The party wants government to grow the economy instead and is calling on the BTB to justify the increase with data. BTIA President Efren Perez says price-conscious travellers may simply look elsewhere.

 

Efren Perez, President, BTIA

“We’re exploring Europe and travellors are very price sensitive. When you are marketing yourselves internationally and looking at positioning the Belize brand out there, you’re competing against countries like Costa Rica, like the Dominican Republic that’s next door. And their pricing is much different than us.”

 

Stakeholders say they need more information about how the proposed tax increase would be used. General Manager of Naia Resort in Placencia shared his thoughts.

 

Stewart Krohn, Managing Director and General Nanager, Naia Resort

“That’s a lot of money they’re talking about. What are they gonna do with that money? Is it the central government that wants the money? Is it BTB that wants the money? What do they propose to use it for? So these are some of the things at this point the industry just doesn’t know. There is no written proposal that we have seen from government, and I think that, it’s necessary that we’ll have to speak to government and find out exactly what it is that they want.”

 

The BHA formally raised its concerns with the Ministry of Tourism last week, urging the government to provide greater support for the industry. Talks on the association’s proposals are now underway. Britney Gordon for News Five.

 

Attention readers: This online newscast is a direct transcript of our evening television broadcast. When speakers use Kriol, we have carefully rendered their words using a standard spelling system.

 

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