Jamaican hotels challenge Booking.com over tax fee

WESTERN BUREAU:

Jamaican hoteliers are challenging Booking.com’s decision to charge commissions on government taxes, warning that the November 17 implementation will increase operating costs as properties continue rebuilding after Hurricane Melissa.

Jamaica Hotel and Tourist Association (JHTA) President O’Brian Heron confirmed that he met with representatives of the online booking giant on October 28, when the company promised a formal follow-up. He has also alerted the Ministry of Tourism to the industry’s concerns.

The dispute has intensified across the Caribbean, prompting the Caribbean Hotel and Tourism Association (CHTA) on Monday to reaffirm its opposition to the policy and announce that it is examining possible legislative protections for governments to consider.

At the centre of the controversy is Booking.com’s decision to include government-imposed taxes in the amount on which it calculates commissions, although those taxes are collected by hotels and remitted to national governments.

“The Jamaica Hotel and Tourist Association strongly opposes Booking.com’s proposed inclusion of government taxes in the amount on which it calculates commission,” Heron said.

“These taxes are collected from guests on behalf of the Government of Jamaica and remitted to the Government. They are not revenue earned or retained by accommodation providers.”

He insisted that hotels should not be required to pay commissions on money they are legally obligated to hand over to the Government.

Booking.com has described the change as part of a global standardisation of its commission calculation practices.

However, Heron argued that the arrangement effectively increases the platform’s earnings without providing any additional service to accommodation providers.

Using an illustrative 15 per cent commission and 10 per cent General Consumption Tax (GCT), he explained that the effective commission would increase to 16.5 per cent of the room revenue before tax.

For a room costing US$100 before tax, the commission would therefore increase from US$15 to US$16.50.

“This additional burden comes while our members are managing high operating costs and rebuilding after Hurricane Melissa,” Heron said.

“Smaller properties that depend heavily on online booking platforms are particularly exposed, with potential consequences for reinvestment, employment and Jamaica’s competitiveness.”

The concern is particularly significant for independent hotels and smaller accommodation providers that depend on international booking platforms to attract overseas visitors.

Heron also questioned the manner in which Booking.com is implementing the revised terms.

“We are also concerned about the terms of implementation, including treating continued use of the platform as acceptance before members have received the updated agreement,” he said.

FAIR AND REASONABLE ARRANGEMENTS

The JHTA president maintained that although the association valued its relationships with international distribution partners, those arrangements must remain fair, transparent and commercially reasonable.

CHTA, which represents 32 national hotel and tourism associations across the Caribbean, said its opposition dates back to May, when Booking.com first notified accommodation partners of changes to its commission calculations.

The policy took effect in certain destinations on May 15, while hotels in Jamaica and Antigua and Barbuda subsequently received notices indicating that it would apply to new bookings beginning November 17.

CHTA President Sanovnik Destang said the issue went beyond the additional financial burden.

“Taxes remitted to governments belong to those governments and sit outside hotel revenue,” Destang said.

“Applying a commission to those funds raises the cost of distribution while hotel earnings remain unchanged. This is a matter of principle and fairness that affects accommodation providers across our region.”

The regional association is also questioning the consistency of Booking.com’s commission practices internationally.

According to CHTA, the company’s published terms exclude government taxes from commission calculations in the United States, with additional exclusions in Dubai and Egypt. Published terms for the United Kingdom, however, include taxes in the commissionable base.

CHTA is demanding greater transparency and comparable treatment for Caribbean accommodation providers.

The association said national hotel bodies in Barbados and the Turks and Caicos Islands had also taken action, including issuing guidance to their members and publicly opposing the policy.

In a potentially significant escalation, CHTA disclosed that it is reviewing legal and tax frameworks across Caribbean jurisdictions and evaluating legislative protections that governments could consider.

The regional body is calling on Booking.com to reconsider the policy, exclude government-imposed taxes from commission calculations and engage Caribbean hospitality stakeholders in finding a resolution.

CHTA Chief Executive Officer Vanessa Ledesma said the Caribbean had contributed substantially to Booking.com’s growth and deserved equitable treatment.

“The Caribbean has been a committed and contributing partner in Booking.com’s regional growth,” she said.

“It is because of that partnership that we are asking Booking.com to reconsider this policy and to work with Caribbean hospitality stakeholders toward a fair and equitable resolution.”

janet.silvera@gleanerjm.com