Tourism recovery must not be compromised, says JHTA boss

WESTERN BUREAU:

Jamaica Hotel and Tourist Association (JHTA) President O’Brian Heron says he is hopeful that upcoming talks with the Government will influence its decision to increase general consumption tax (GCT) on the tourism sector, which has still not fully recovered from the devastation caused by Hurricane Melissa.

Speaking with The Gleaner following Friday’s annual general meeting of the JHTA in Montego Bay, St James, Heron said the hotel and tourism industry cannot afford an increase in GCT at a time when it is still picking up the pieces from the impact of the Category 5 hurricane, which battered the sector last October.

He was responding to a proposal by the Government to increase the sector’s applicable GCT from 10 per cent to 15 per cent.

“We understand that there is a fiscal target that is set, and we understand the Government’s responsibility to ensure the gaps are closed. What we want to do is ensure that the tourism industry does not become burdened to the point where there is an affordability issue that really impacts our membership,” said Heron.

“There isn’t a specific timeline that has been set for our next meeting, but we requested a follow-up through the Ministry of Finance, and I am anticipating that we’ll get to the table within the next two weeks. There are opportunities that we believe can be explored that will help the Government to close the fiscal gap without compromising the recovery work that needs to take place within the industry,” he added.

Several hotels across western Jamaica suffered catastrophic damage during the passage of the hurricane. Some 14 hotels remain closed, and approximately 5,648 hotel rooms are yet to return to service. In March, the Ministry of Tourism stated that it expected all hotels to fully reopen by December.

Heron said that while hotel rooms are gradually coming back into service, that does not mean the sector has completely recovered to pre-Melissa levels of operation.

“We probably have about 25 per cent of our hotel rooms that are left to come back on stream, and we are seeing where a number of players are going to come back online by the end of this year and, after that, you push to the first and second quarter of 2027. There is a difference between recovery and rebounding, and I think what a lot of people tend to do is to mix up the two,” he said.

“Recovery gives the impression that life has gone back to what it was prior to that specific shock, and our latest example of a shock is Hurricane Melissa. What has happened over time is that the industry has been able to rebound after each shock but has not been able to sustain that to the point of full recovery, so you get hit with a shock, you try to pivot, and the shock hits you again,” he said. “Because of that, businesses have really not been able to fully recover economically.”

Meanwhile, Kyle Mais, the JHTA’s second vice president and managing director of the Jamaica Inn Resort in Ocho Rios, St Ann, said hoteliers are continuing to struggle to remain competitive in the Caribbean tourism space following crises such as Hurricane Melissa.

“We are in a very challenging position because, after COVID-19, Hurricane Beryl, and Hurricane Melissa, we still have not even been able to access our insurance claims. The balance sheets of many operators are far different from what they were before, costs are going up, and we cannot necessarily increase our rates anymore to be competitive with the rest of the Caribbean, much less the world,” he said. “There are many constraints we have that we are dealing with, and we are really at a crossroads, and it could be a crisis or an opportunity for us.”

christopher.thomas@gleanerjm.com