Stakeholders in the tourism industry are gearing up for what they believe will be significant benefits that will come when a convention tax arrangement between The Bahamas and the United States comes into effect in January 2006.
The tax provision was a part of the agreement signed on January 25, 2002 between the United States and The Bahamas to exchange tax information.
Article 5 of that agreement states that, “A United States taxpayer may deduct from income costs incurred with respect to attendance at a conference or convention held in The Bahamas in the same manner and to the same extent that such taxpayer is permitted to deduct such costs with respect to attendance at a conference or convention held in the United States.”
Director of Group Sales in The Ministry of Tourism James Malcolm said recently that tremendous opportunities will come as a result of this provision.
“One of the biggest opportunities will be the chance for growth in the infrastructure in the Family Islands,” Mr. Malcolm said.
“This means not only more revenue being raised, but a better way to diversify that revenue to share the wealth and that is going to require a team effort from all sides. I believe the outer islands will be able to grow their business whether it is the taxi drivers, or the people [who] run snorkeling or fishing trips, restaurants or any vendors or people [who] are supplying the business.”
But he noted that there are also challenges associated with the convention tax provision.
“Every developer, every hotel [in the] industry and every island destination has different forces and objectives that are driving them and I think that one of our biggest challenges now is the shortage of rooms, primarily in Grand Bahama,” Mr. Malcolm said.
However, some of these challenges are expected to be addressed when the Atlantis Phase III expansion is completed at the end of 2006 and other projects around The Bahamas come on stream.
The Baha Mar Cable Beach redevelopment project also envisions expanded facilities that will in another few years be able to help accommodate the demand expected as a result of the new tax break, according to tourism officials.
Andre Newbold, director of sales and weddings at Sandals Royal Bahamian Resort, said the initiative would help to level the playing field.
“We rely very heavily on the United States to fill the shoulder seasons as it relates to groups and incentive business,” Mr. Newbold said.
“Our convention facilities can hold up to 600 persons. We cater to groups now as we speak and this will only enhance business. We lose a lot of groups within the United States and other destinations such as Hawaii and places like Puerto Rico.”
Jeremy McVean, former president of the Bahamas Hotel Association, and general manager of Comfort Suites on Paradise Island, said that while the provision will definitely benefit large properties like Atlantis and The Cable Beach Resorts (Baha Mar), the entire country will in the long term see positive results.
“So from our point of view it will have almost zero impact, but overall it is a good thing,” Mr. McVean said.
“Once Atlantis completes the extension to their convention centre [there should be added benefits] and overall for the country it is going to mean that The Bahamas will be able to attract the really big conventions.”
Stephen Kappeller, regional manager of The Holiday Sunspree on Paradise Island and the Nassau Palm Resort in New Providence, believes smaller properties like his will help meet the demand for hotel rooms when more conventions start coming to town.
“I would expect demands would increase for rooms as a result of the agreement,” Mr. Kappeller said.
By: Royanne Forbes, The Bahama Journal
