CHTA President Asks Governments to Do More for the Sake of Tourism Investment

Caribbean Hotel & Tourism Association President (CHTA) Josef Forstmayr opened the 16th Annual Caribbean Hotel & Tourism Investment Conference (CHTIC) here with a call for Caribbean governments to rethink tax policies with an aim to remove or reduce consumption taxes on hotels and tourists.

He also urged tax incentives to attract more investment and for effective public/private sector partnerships to stimulate investment and product development. The full text of his remarks follows:

Ladies and gentlemen it is my pleasure to welcome you to the 16th Annual Caribbean Hotel & Tourism Investment Conference.

I would like to thank our hosts, the Puerto Rico Tourism Company and the Puerto Rico Hotel & Tourism Association for their support of this conference and the Sheraton Puerto Rico Hotel & Casino for providing an excellent venue for this event.

Thank you also to the Caribbean Tourism Organization (CTO) and the various ministers and officials of tourism of the region for their strong and visible support.

The presentations that we will enjoy here over the next two days will no doubt provide many statistics and tourism-related data. It is encouraging to note that the Caribbean has in fact seen record tourism arrivals in both 2010 and 2011.

Today I would like to address one particular issue that I am extremely concerned about. It is our governments' appetite for taxation of the tourism industry which continues to increase unabated.

There is no question that tourism is an export industry. Unfortunately in the Caribbean, tourism is still not treated as an export by many of our member countries. We hear of new policies that taxes not only the private sector, but also our visitors directly. These masquerade under such names as, 'Airport improvement taxes', 'Tourism enhancement fees' and by far the worst of all, the UK's Airline Passenger Duty (APD).

Increased taxation is regressive. It will result in less revenue for the hotel and attraction sector. It will also negatively affect our countries' wider economies due to the significant domestic agricultural and manufacturing linkages that tourism provides.

Our governments must make a serious effort to review their taxation policies on the tourism industry. It is time now to remove or reduce all excessive consumption taxes on our visitors. It is also time to re-think all policies which call for an increase of these consumption taxes. Our industry is based on competitive pricing. Our visitors will simply choose other destinations which provide better value.

Furthermore, we need tax incentives to attract the investment that is needed for the Caribbean to maintain its appeal and competitiveness as a world-class tourist region.

We need effective public/private sector partnerships that will stimulate the investment and product development which are critical to the growth of tourism.

The Caribbean tourism industry needs strong advocacy, and I am pleased to say that CHTA's 'Tourism is Key' advocacy campaign, launched two years ago continues its momentum. It is one of the most important initiatives that we have undertaken in our 50-year history. The program has now been launched in 11 Caribbean countries, with more planned for this year.

The 4 pillars of the "Tourism is Key" campaign are:

1.     Advocacy with governments and citizens
2.     Linkages of tourism into local industry, agriculture and services
3.     Regional integration (improved airlift, less bureaucracy for regional travel)
4.     Regional marketing

We must create a strong consensus with both our leaders and the public so that travel and tourism receives the full support it needs as the Caribbean's most vital export. It is the fastest way to create jobs, grow the economy and generate income for all.

I am proud that the Jamaica Hotel and Tourist Association (of which I am a member), has just published a comprehensive study, titled: "Travel & Tourism as a Driver of Economic Development in Jamaica."  The research was undertaken by Oxford Economics and among the key findings and observations are:

•    The overall Jamaican economy enjoys strong linkages with tourism, driving 15 percent of all construction, 20 percent of all manufacturing and 21 percent of all agriculture/fishing.
•    71 percent of hotel and restaurant revenue remained on-island (thereby debunking the myth of leakage offshore).
•    In 2010, Jamaica's travel and tourism industry contributed JA$38 billion in tax revenue; 20.4 percent of all government revenue.
•    Tourism contributes 50 percent of all Jamaican exports.

What is of particular significance about this study is that it was able to show, not only the singular importance of tourism to the Jamaican economy, but also its importance relative to other industries. We feel that this is a major step forward in our ability to highlight the key role that tourism plays in our economies. CHTA is now working with Tourism Economics to develop such a study for the whole Caribbean region; this will be a part of our on-going 'Tourism Is Key' advocacy initiative.

Ladies and Gentlemen, we have a very comprehensive program to engage us over the next two days; I look forward to joining you.

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