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Tourism concessions

The Barbados Government, which is taking over Almond Beach Village, in St Peter, today outlined a series of concessions it was giving to Sandals International Resort to manage the near 400-room hotel and purchase Couples in Dover, Christ Church.

In a ministerial statement to the House of Assembly, Minister of Tourism Richard Sealy said, however, that the same concessions being given to Sandals would be made available to other players in the local tourism industry.

“All inputs for construction are to be free of all taxes and other imposts. This concession has been given previously to other projects, such as Westmoreland and Marina. Such concessions are also generally available to approved tourism projects and products under the Tourism Development Act,” declared Sealy about the concessions being provided to Sandals.

He said this was therefore not new, for the tourism industry in Barbados. The minister said the tax concessions for imputs required for the operation of Sandals would include such items as linen and cutlery.

These items, he argued, are available to all hotels as articulated in the second schedule of the Tourism Development Act, which has now been updated as of August 5, 2013.

“We however believe we should go further to support the tourism industry in the competitive and dynamic environment in which it operates, where product-offerings have to be constantly updated,” Sealy observed.

He said that in order to address this issue, a further amendment will be made to the Second Schedule which will essentially allow every hotel to get what it needs to stay competitive within reason.

The minister announced that the new system would also have to be controlled to stop abuse, but will have the full support of the tourism industry.

“The third category of concessions is new…tax concessions for food and beverages. Sandals property in Barbados will provide on average, an additional 130,000 visitors; and as stated earlier, will result in an investment of Bds$500 million,” Sealy reported.

“It is proposed,” the minister continued, “that with immediate effect, all investments of this size, that is, BDS$500 million, or greater, in the all- inclusive segment of the market should qualify for this concession. The matter will remain under constant review, since it is also proposed to extend the concession to all other inclusive operators in Barbados, as Government finances permit.”

He said it should be appreciated, that giving this concession to new players in the industry, will not result in a loss to the treasury in taxes, as no taxes are being collected now, because there is no existing hotel that is located.

The tourism minister told the House, too, that Sandals International Resort will be seeking a duty free license to operate some of its speciality shops at the two hotels. Again, he reminded, that this measure was not new, since any Barbadian can open a duty-free shop, once the necessary criteria are met, inclusive of a bonded warehouse. He said the final category is for the hotel to ensure it has the human resource skill sets to provide world

class hotels. “It will be necessary for example, to have chefs

from the country of origin, for the cuisine being offered at the 15 restaurants of Beaches property. In all instances, Sandals will be seeking to source skills locally, before looking farther afield. Government is also satisfied that the labour to be imported, will be a small fraction of the 1,500 jobs to be created.”

The minister assured said it was expected the two properties would contribute annually in net terms, in excess of BDS$100 million to the local economy. All this, he noted, would result in an incentive regime that would make the Barbados’ tourism environment competitive.

“We’ve also been forced to reconsider the condition of our product offering which in many cases has become tired and dated. To address this latter concern, government will be augmenting in a very substantial way, the already-created $50 million fund to the local tourism industry, with a window for grant funds of such activities as energy audits, marketing and back office support,” Sealy said, adding that another window would provide concessional long-term funding for upgrading the product, offering of the existing hotels and other accommodation in Barbados.

“Such upgrades must be done to agreed international standards to qualify for funding. (EJ)

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