Two iconic East End hotels have been granted tax breaks after moving forward with plans to upgrade the properties.

The Grotto Bay Beach Resort & Spa and the Hillcrest Boutique Hotel — formerly Aunt Nea’s Inn — qualify for the relief under the 2017 Tourism Investment Act.

The legislation was drafted to encourage resort owners to invest in upgrades to their properties in a drive to make the island more attractive and increase visitor numbers.

Hotel owners qualify for 15 years’ relief from customs duty, hotel occupancy tax, landholding charges and the employer’s share of payroll tax.

Putting forward the orders in the House of Assembly on Friday, tourism minister Owen Darrell said that both properties would qualify for the full exemption.

Mr Darrell told MPs that Hillcrest was bought by its present owners in 2023 and had since undergone a series of modifications.

The property, built in the 1770s, now consists of 14 suites. Upgrades in the pipeline include a heated pool, a six-person hot tub, sauna, indoor and outdoor lounges with a fire pit and a gym and massage room.

Highlighting the historic significance of the property, Mr Darrell said it was the first hotel to accept Black guests during segregation.

Mr Darrell said: “The Hillcrest Boutique Hotel offers timeless elegance — a private, tranquil, comfortable home away from home, with every modern amenity at affordable prices.”

He added: “This government's support of this tourism product is in the economic interest of Bermuda.”

Turning to the Grotto Bay’s redevelopment proposals, Mr Darrell said: “The owners have taken the foundation laid down by their predecessors and have determined to grow the status of the hotel to meet the true luxury standard befitting its location.”

Mr Darrell said that there were two phases to upgrades, which began in 2023 and included an expansion to dining rooms, a rooftop lounge and the resort’s beach.

Mr Darrell added: “Phase two will consist of the construction of 53 additional guest rooms, expansion of the hotel kitchen and the construction of a new sewage treatment plant to meet the demands of the larger hotel.

“The Government’s goal is to create conditions that inspire confidence at every level of the tourism economy, sparking a desire to invest and reinvest as we continue to see the recovery of tourism for Bermuda.”

Both proposed orders were backed by the Opposition.

Dwayne Robinson, the shadow tourism minister, said that the developments would support economic activity in the East End.

He said: “We welcome and support this. It is something that unifies both sides of the House.

“We want to see the tourism industry grow. We want to see investment in our tourism attractions and properties and I have to say that hearing the minister read that brief, it is very great news to hear.

“The more people we can service, the more people we can house, the more the benefit to the economy, so I want to congratulate the owners and I think it shows a good amount of faith in the owners to reinvest in their property.

“When you see an expansion like that it does show confidence.”

Mr Robinson voiced one concern over the granted concession. Under regulations, properties can only qualify for breaks if 75 per cent of staff are Bermudian.

Mr Darrell explained that surveys had shown that 77 per cent of Grotto Bay staff were Bermudian — and that the Hillcrest employed 100 per cent Bermudian staff.

David Burt, the Premier, had the last word in the debate.

Referring to the former Aunt Nea’s Inn and its owner, Mr Burt said: “The reality is that the transformation that Ms Veronica Gordon has managed to make of that particular property is incredible.

“It is a beautiful property. It is without question an addition to the Olde Towne, but it is also the recognition that if you put in place the types of legislation that are necessary to support investment, investment will come.

“It is also important that we recognise and understand that if we do not put the incentives in place that persons will have in other jurisdictions … it is important that we keep that in context.”

Mr Burt also apologised to the property owners for the time it took for the concessions to be ratified in the House.

He said: “I do apologise that this has taken the amount and of length of time that it did.”

Mr Burt admitted that there had been “administrative challenges”.

“This is not the standard of which we should be allowing,” he said.

“Nonetheless, the tourism concession order will pass today.”