Plan to cut red tape aims to boost hotels
Tourism minister Michael Fahy has drafted a Bill in the Senate to “eliminate the cumbersome and costly” administration process for hotels and tourist attractions to gain concessions.
Mr Fahy’s Tourism Investment Act 2017 will also ensure that businesses are providing training programmes and employment for Bermudians to qualify for relief. It aims to stimulate more tourism development opportunities and to capitalise on the excellent work the Bermuda Tourism Authority is doing to attract more air arrivals and create new experiences.
The Hotel Concessions Act 2000 was created to encourage investment in hotel development through tax breaks and the removal of some land restrictions.
However, Mr Fahy said the concession orders under the act have been “underutilised” with only $19.3 million in relief being granted since 2000. He added that the “arduous process” had proven “administratively burdensome and costly for all hotels”.
He said that with the help of the Bill, over the next ten to 15 years, the relief being budgeted would be about $63.3 million.
“The proposed Bill would encompass the full spectrum of Bermuda’s tourism product and would demonstrate a shift from the status quo to a jurisdiction that wants to compete in the global tourism market,” Mr Fahy told senators.
He hopes the changes will cut the red tape in approving relief and make it more attractive for developers to build new hotels, restaurants and attractions.
The Bill will focus on ensuring that there are training programmes in hotels with orders that are granted for more than five years, and that each hotel provides proof that at least 60 per cent of its workforce is Bermudian.
Mr Fahy said the aim was to create a “competitive investment environment” in Bermuda allowing hotels to become profitable and “no longer reliable on government tax relief/rebates” while encouraging Bermudians to take advantage of economic opportunities in the tourism sector.
There would be a scaled relief structure with brand new hotel builds on vacant spots receiving the highest concessions including 100 per cent relief on customs duty, hotel occupancy tax, and land tax for up to 10 years on the condition that after five years 60 per cent of the staff make up is Bermudian.
Refurbished hotels received similar entitlements but only for a five-year period while concessions are further reduced for restaurants and attractions.