Hotelier warns more Sandals-like tax breaks could lead to mass closures

Seale warns more Sandals-like tax breaks could lead to mass closures

The controversial Hyatt Centric Resort planned for Bay Street, The City, and the Wyndham Grand Resort on the site of Sam Lord’s Castle in St Philip may be given tax concessions similar to that received by Sandals, one local hotelier has suggested.

However, owner of Sugar Bay Barbados Resort Gordon Seale is warning that if this happens, local hotels will not be able to compete and could be forced to shut down.

“We will not be able to compete, if, as rumour has it, Hyatt is given the same things that Sandals was given and Wyndham would get those and the new Beaches [Resort] gets it as well. You will effectively knock out a lot of the local successful hoteliers. The chances of us being able to survive … are very, very slim,” Seale warned today during a panel discussion at Lloyd Erskine Sandiford Centre on the topic, The Importance of Local Direct Investment in the Tourism Industry. The discussion formed part of the fourth quarterly meeting of the Barbados Hotel and Tourism Association.

The concessions given to Sandals have been controversial from the start, with local hoteliers complaining that the playing field had been rigged in favour of the Gordon Butch Stewart-led property.

In order to attract the Jamaican hotel chain here, the Freundel Stuart administration offered a 25-year tax holiday that includes a waiver on all import duties, taxes, impost and levies on capital goods such as building materials, as well as food, alcohol and beverages.

The waiver also extends to duties on the importation of motor vehicles and personal and household effects for senior hotel staff and non-Barbadian workers.

When the tax holiday period is over Sandals will only be required to pay half the “applicable rates and taxes prevailing” for another 15 years.

In late November 2013, just days after Sandals opened its doors at the former Almond Casuarina in Dover, Christ Church, Minister of Tourism Richard Sealy said the tax holiday was not exclusive to the Jamaican hotel chain and that any other all-inclusive hotel making a heavy investment here could get the same concessions.

However, Seale said today when he sought to get similar tax breaks under Cap 67B of the Tourism Development Act he got the runaround and a denial.

“This thing [Cap 67B] is not working in the way that we are being given the impression that it is working. We now have about 450 employees and not a single duty-free vehicle. I did apply and I was refused by the minister,” Seale said.   

“I think it is very unfair to the local investor . . . I don’t see how it is possible to cherry pick and say that you are going to give one company or another company such major advantages. The concessions that have been given to Sandals are so extensive if we had to go that far to get Sandals here then clearly there is a much bigger underlying problem,” he stressed, while adding that unless there was a level playing field local hoteliers would sell to “one of those international investors”.

Similar concerns were raised by Paul Doyle, the owner of Crane Beach Resort, who explained that local hoteliers simply did not have the budget to make in one go, the level of investment required to qualify for similar incentives.

“We will do it over time but we can’t do it all at once. So if you’ve got a regulation that takes us all out of [the equation] I don’t think that is good public policy. I am all for ‘let’s give everybody a chance’. I am not talking about handouts, I am saying give everybody a chance,” Doyle said.

Pointing to the exit of some major companies from the local hotel business over the years including Massy, Doyle suggested that they left because the current regime was simply not working.

Meantime, though not dismissing their concerns, Chief Executive Officer of the Barbados Tourism Investment Inc Stuart Layne was careful to point out that both local and foreign investors in the sector were benefiting from Government concessions.

Defending the current regime, Stuart said the Tourism Development Act provided the local hoteliers with an advantage, saying it made it easy for them to add items to the list for concessions.

“The legislation is our servant . . . we sit down and make this thing relevant for us. If it isn’t working for us we say, ‘well it is not working and we make the amendments,’” Stuart said.

marlonmadden@barbadostoday.bb

29 Responses to Hotelier warns more Sandals-like tax breaks could lead to mass closures

  1. Saga Boy December 14, 2017 at 1:01 am

    People like Gordan Seale has benefited tremendously from gov concessions over the years. They want all for themselves. Is Sandals with their own marketing strategy and call Centre competing with his hotels? How many concessions have you gotten over the years? How many businesses have you registered overseas to collect bookings from guests who stay at your hotels? Competition is good. It should help to raise your standards. Just remembered that you don’t like black vendors on the beach near your hotels.

    Reply
  2. Nathaniel Samuels December 14, 2017 at 1:55 am

    Saga Boy, you are missing a very important factor. These all-inclusive resorts like Sandals collect all their monies outside and only bring enough in to run the hotel so the foreign exchange that we should be getting here is not seen. Yet you are cuss the local business men of not putting any foreign exchange into the local economy. They do not collect as much as these hotels that get all these breaks. The playing field must be leveled else the industry will die a not so slow death.

    Reply
  3. Saga Boy December 14, 2017 at 6:14 am

    @Samuels. All of them do the very same thing. How would you know who collects more than who? I never said that local business men are not putting any foreign exchange into the local economy. Not only are the hoteliers keeping foreign exchange out of the island but so to are those involved in retailing and wholesaling as well are the car dealers. I agree with you about the all inclusive hotels. They are bad for the island.

    Reply
  4. seagul December 14, 2017 at 6:34 am

    They continue to strip Barbados of our ‘independence’.
    Begging these international boutique hotels to come to Barbados on whatever terms they want; and fogging off the country’s state assets. How much longer shall this go on ?
    All hoteliers are somewhat parasites in the mindset. The sad fact is that Government runs its affairs so that it is forced to beg on special terms with Swiss banks like Credit Suisse; or is forced to beg Sandals to come to Barbados on whatever terms Sandals wants. This freedom in the Caribbean is the freedom to be taken advantage of by government-supported plantation type hotels.
    They have restricted many an independent black free entrepreneurial agenda. It is almost impossible in our market driven society to understand what can be done to fight this colonial economic mafia type supremacy. Now they’re stabbing each other in the back for the riches of our exploitation. It seems our public purse, the hard-working black laborer and consumer class is treated as anybody’s cash cow! Regulating of these exorbitant boutique rates need to face serious speculation. After these wealthy proprietors reap their profits off the backs of the low income earners they move on to the next location without a care. All this discussion about marinas etc, one would think Barbados is a large island, it’s just a tiny isle where the workers need full support. But soon one and all will face reality.What amazes me is the allowance for these hypocrites to parade along the streets as though everything is equality and fair. On my last trip home I’ve seen many signs of things beginning to fall apart.

    Reply
  5. Arthur Collymore
    Arthur Collymore December 14, 2017 at 6:51 am

    I totally agree with Mr Seals. The danger in this, as he pointed out, it that the local hotelier is forced out of business while operatives in govt get rich for giving away our tax dollars.

    Reply
    • Gillian Skeete
      Gillian Skeete December 14, 2017 at 10:25 am

      He was all involved in that sweet deal no?? Now he comes saying what every rational Bajan knows already!!!!

      Reply
  6. Tee White December 14, 2017 at 7:21 am

    “…..the Freundel Stuart administration offered a 25-year tax holiday that includes a waiver on all import duties, taxes, impost and levies on capital goods such as building materials, as well as food, alcohol and beverages. The waiver also extends to duties on the importation of motor vehicles and personal and household effects for senior hotel staff and non-Barbadian workers. When the tax holiday period is over Sandals will only be required to pay half the “applicable rates and taxes prevailing” for another 15 years….”. Then they talk about the government’s fiscal deficit, privatising state owned enterprises and sending home government workers. This is Barbados run for the rich, both foreign and local, where the interests of the mass of Bajans count for nothing.

    Reply
  7. Sheron Inniss December 14, 2017 at 7:29 am

    none of wunnuh should be getting . steupse

    Reply
  8. Danny Clarke
    Danny Clarke December 14, 2017 at 7:47 am

    The thing that got me is that the big brand name hotels don’t need all the sweets . They basically sell themselves. I’ve seen numerous adds on overseas channels promoting Sandals etc including the one in Barbados . I sadly can’t say the same for the hundreds of small hotels here . Who by the way sell a great product and keep ppl employed . The old as the hills saying that the rich will remain rich is so true it ain’t funny

    Reply
  9. Valerie Knight
    Valerie Knight December 14, 2017 at 7:59 am

    Why should hotels setting up in Barbados be given tax breaks. It doesn’t happen anywhere else in the world. When them make enough money they shut the bloody doors file for bankruptcy, with their money in foreign banks,put locals on the dole and hey presto another bloody white elephant left standing.

    Reply
    • frank December 14, 2017 at 10:45 am

      Actually, it does happen all over the world. Several states in the US, recently Africa, Albania, Iran etc all do the same thing.

      Reply
    • Ras Small
      Ras Small December 14, 2017 at 11:09 am

      Does happen everyday in some form or fashion hey in Bim whether it’s tourism- hotels, agriculture, supermarkets, government services, etc. Brown envelopes, under de table hand shakes, price gouging, exploitations, MOU’s, etc.

      Reply
  10. Jerry December 14, 2017 at 8:12 am

    Kudos to Gordon Seale one of the few Local Hoteliers left. The question that we should be asking as a Nation is why today with $9.1 Billion sitting in savings accounts earning little or no return we refuse to invest in our own Tourism Industry .50 years ago almost every hotel was local owned. Our survival as a Nation and access to future foreign exchange earnings depends on tourism . 30 percent is not bad when you have enough available rooms to support our import bill. Our problem is that we do not have enough rooms available to accomodate the number of tourist who wish to visit Barbados in the winter . Concessions should be given to attract Foreign Brands but should be locally owned. The Hilton 350 rooms should have been sold as shares to locals not given away for 60 cents on the dollar by a depesperate broke Government.

    Reply
  11. Rawle Spooner
    Rawle Spooner December 14, 2017 at 8:25 am

    Looks like these small hotels might have to pony up some kickback cash to get sweet deals and concessions.Guess when the Hilton hotel is undersold for 100 million less than market value guess the owners gine be getting same sweet deals as Sandals.

    Reply
  12. Carson C Cadogan December 14, 2017 at 9:43 am

    Talking Rubbish as usual.

    Reply
  13. milli watt December 14, 2017 at 10:16 am

    you all parasites need to stop banking this island foreign exchange outside

    Reply
    • Jennifer December 14, 2017 at 1:11 pm

      But they don’t live here. Different investments too.

      Reply
  14. frank December 14, 2017 at 10:52 am

    I think one key point that is not being made is that company’s like Sandals do NOT compete directly with small local hotels, in fact they help more than anything else. The people who go to Sandals pay upwards of US$600 a night for a room, that’s a unique niche. The traveler on a budget, who are the majority, will still go to local hotels. In fact because companies like Sandals offer marketing and increased airfare, local hotels benefits indirectly. Not everyone who sees a Sandals ad will stay at Sandals hotel, and most of the folks who book seats on an airplane are probably not staying at a Sandals resort, they will look for a more affordable option, which helps the occupancy in some of these hotels. Its a symbiotic relationship and what we need to be talking about are ways to enhance it. You need the brands, just ask Tobago, they are suffering because all they have are local hoteliers! And the locals hotels are the ones now encouraging government to bring in Sandals. Think about that.

    Reply
    • frank December 14, 2017 at 10:53 am

      Increased airlift I meant

      Reply
  15. Damian Edghill
    Damian Edghill December 14, 2017 at 11:22 am

    The point about concessions is well made. In addition, do they bring in foreign exchange (FX) to build their hotels, which require high levels of imports paid for in FX, or are their hotels built out of Barbados’ FX reserves?

    Reply
  16. Jennifer December 14, 2017 at 1:09 pm

    Now who the hell pays to be a slave?? Oh god, and now the tide has truly turn.

    Reply
    • Jennifer December 14, 2017 at 1:20 pm

      Take away from the little fish to feed the big fish then they in turn minimise other little fish. Sounds so canker.

      Reply
  17. Jus me December 14, 2017 at 1:37 pm

    Finally
    Hotel Barbados gine close.

    Reply
  18. Robert December 14, 2017 at 1:39 pm

    If there is a need of hotel , someone will build it, without subsidy .
    Why the government finds it necessary to subsidize the hotel industry escapes me. If a business can not exist without a subsidy it does not to deserve to exist. All the government is doing is buying jobs without realizing their true cost. Once the subsidies are over and the physical plant run down are the owners going to reinvest or walk away ? My guess without renewed subsidies , walk away!

    Reply
  19. Saga Boy December 14, 2017 at 2:01 pm

    @Robert. Subsidies and incentives are required because investors and hotel owners are simultaneously courting and considering setting up in other parts of the world. If we have the best incentives chances are we will beat St.Lucia and others. It is very competitive.

    Reply
  20. Ralph W Talma December 14, 2017 at 6:07 pm

    1. As I said many months ago: you are welcome to build your hotel, but without subsidy, and we will want 49% share in it.
    2. This will ensure some profits will remain in the Island for the benefit thereof. That used to be the thinking in the old days when many hotels and guesthouses were owned and successfully operated by Bajans.

    Reply
  21. Robert December 14, 2017 at 9:13 pm

    Saga Boy:
    I have no doubt there is competition amongst the islands. I doubt if the hotels currently operating have 100% occupancy even in the high season. I believe if there is money to be made in the hotel business, hotels will be built, with or without subsidies.
    The problem with unfair subsidies which is the case with Sandals and their ilk in Barbados is they succeed at the cost to the other hoteliers who do not have this subsidy .

    Reply
  22. C.Brown December 15, 2017 at 4:24 am

    Strange how you only have 2 hoteliers who are willing to state their grievances. Power is in being a collective body. The situation with Sandals is scandalous.

    Reply
  23. Steve December 17, 2017 at 4:33 pm

    The concessions these places are given are ridiculous and not fair to local businesses – What about the local hoteliers that help build the tourism industry from the ground up? Give them a break if anyone!! Help local businesses so we can in turn help the tourism industry !!
    P.S Rest in Peace Maxwell mangrove

    Reply

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