By Steve Thomas Observer News Editor (Charlestown, Nevis) ” The price for spending the night on Nevis will increase under proposals put forward by the Nevis Island Administration. The tax hike ” which will increase the cost of staying in a hotel ” has won support among some hotel operators who say it’s necessary for the long-term good of the local tourism industry. In his Budget Day presentation, NIA Premier Joseph Parry said raising the accommodation tax and extending an existing levy will create special funds to assist hotels during economically stressful times and help preserve the island’s beaches. “The constant disruptions to our economy from the passage of hurricanes, and the repeated shocks from the global economy, we have to act with urgency to cushion ourselves. With this objective in mind, during 2009, the government will establish two funds; namely, a Tourism Contingency Fund and a Coastal Protection Fund. An additional 1 percent will be charged on the Hotel Accommodation Tax and the receipts will be deposited into the Tourism Contingency Fund to be used to assist hotels that are under financial stress from external shocks or hurricanes,” Mr. Parry said during his Dec. 9 speech. The accommodation tax is currently 9 percent. The premier did not specify when the tax increase would take effect. According to Mr. Parry, the money will be tightly controlled. However, the funds will be available to help insure continuing airline service to Nevis. Some air access to the island was curtailed earlier this year as companies, faced with skyrocketing fuel costs, reduced flights. “When hotels endure these challenges, they often request various concessions from government to aid in keeping their staff employed. Since the hotel sector is one of the largest employers, we have had to make tremendous sacrifices by granting subsidies at times when the government itself is also feeling the strain from those shocks,” Mr. Parry said. “We will also utilize these resources in exceptional cases to guarantee flights to Nevis that are important to the tourism industry. It is expected that as we increase the room nights on the island, the need for these guarantees will be diminished. The fund will be kept separate from the general consolidated fund and the Ministry of Finance will be responsible for its management along with representatives from the Ministry of Tourism and the Tourism Authority. In consultation with the hoteliers, we will establish very strict criteria for access to the facility.” According to one resort manager, Mr. Parry and a government tourism official met with a number of hotel officials one week before the Budget Day presentation to discuss the proposed tax hike. Although no one wants higher taxes, the resort manager said most of the private sector participants agreed that seeking the extra money was justified. “We prefer not to have to pay more taxes. We prefer not to pass it on to our guests,” he said. “But the government made some concessions and I think, in general, we have to do this.” The owner of Montpelier Plantation Inn and the chairman of the Nevis Tourism Authority, Timothy Hoffman, also supports the proposal. “I think it’s something we have to do,” Mr. Hoffman said. “If the government uses [the money] wisely, we”ll be able to increase airlift to the island. You don’t want to find you”re taxing people too much to travel here, but I think it’s something we need to do.” In addition to boosting the accommodation tax, the NIA plans to extend an existing levy. The money, Mr. Parry said, would be used to preserve the coastline of Nevis. “There is presently a coastal protection levy in place which is a head tax of US$10 per night for visitors staying at the Four Seasons Resort. This tax was introduced to help the hotel recoup the cost of constructing the break water after the devastation caused by Hurricane Lenny in 1999,” he said. “It is the intention to extend this tax to all of the hotels and pay the receipts into a coastal protection fund which will be used to protect the coastline of Nevis. In addition, the purchasers of properties on coastal areas will be charged a fee of 2 percent of the value of the property to be placed in the fund. This will only apply where the purchaser is given exemption from the alien land holding license fee. Our coastline and in particular our beaches have been eroding as a result of the passage of hurricanes, and if allowed to continue unabated will diminish our tourism product. It is therefore imperative that we begin to generate resources so that we could undertake the necessary remedial action to protect our coastal assets for future generations,” Mr. Parry said. Barb Whitman is a marine biologist and educator who operates “Under the Sea” on Nevis, which offers tours and helps the public learn about eco-systems. Ms. Whitman is also a contributor to The Observer. “Having a coastal protection fund is definitely a smart move because the marine environment affects the welfare of everyone on the island in a myriad of ways.” I would hope that the distribution of funds is based on sound scientific information and that the consideration of quick fixes is weighed against the well-being of future generations,” she said.
