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Commentary: Tourism Matters: Think again
Published on July 14, 2014 Email To Friend    Print Version

By Adrian Loveridge

When my now wife and I ‘discovered’ a then virtually derelict Arawak Inn back in 1988, we never really set out to become seasoned hoteliers. More like having the privilege of living in a big ‘house’ right on the ocean and sharing it with a few friends and the many clients who followed us over the years with our British-based tour operators business. Every restored and occupied room was another gallon of paint or new soft furnishing.

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Adrian Loveridge has spent 46 years in the tourism industry across 67 countries, as a travel agent, tour director, tour operator and for the last 24 years as a small hotel owner on Barbados. He served as a director of the Barbados Hotel and Tourism Association, and as chairman of the Marketing Committee. He also served as a director of the Barbados Tourism Authority and is a frequent writer on tourism issues
Our first major setback came when, after paying the initial deposit to buy the hotel, the value of sterling plummeted from over BDS$4 to the pound to BDS$2.88 at the time of completion. As all our funds were brought in from overseas, there was no alternative as an option.

Effectively this wrote-off literally every cent we had budgeted for renovation and improvement of the property. As new residents it was virtually impossible to borrow monies from the banks. They wanted a trading record, three years of audited accounts, cash flow forecasts and business plans among many other requirements. Suppliers, with very few notable exceptions, would not grant us credit and so we learnt very quickly, not only how to survive, but flourish and transform the hotel from earned trading revenue.

While easy to say now, in hindsight, it was probably the best thing that happened, leaving us totally debt-free years later.

What often brings a wry smile to our faces is endlessly hearing the frequent vocal uttering from frankly people who should simply know better that Barbadian hoteliers have constantly got their hands outstretched begging for government (taxpayers) monies. The reality in our case, and I would think the vast majority of other hotel owners, that over the last 26 years we have not received one red cent from this or any previous government.

The single exception is a reduced rate of land taxes, but now that we are currently closed, even this concession has been withdrawn.

Like many, we will struggle to pay the first installment of yet another unbudgeted expense by latest end of this month, the municipal solid waste tax.

Especially at this time of the year, which is the most financially challenging period for our beleaguered tourism industry.

If we fail to do so, we are threatened with a 5 percent penalty plus 1 percent interest on and unpaid balance per month. I wonder how many people have calculated that this is an effective APR (annual percentage rate) of around 22 percent interest.

Take an unpaid balance of $4,000 as an example. $200 in penalties plus one percent per month for six months adds another $240, so a mind boggling $440 in total.

What is especially galling is that we are expected to pay this new imposition before we receive the tens of thousands of dollars we are still owed in NIS and VAT refunds, which have not accrued any penalty and interest, at least to us.

As the minister of finance rightly pointed out, with all the various collection agencies, now under one umbrella, the Barbados Revenue Authority, with a sole Commissioner, it should be a very simple task to resolve this problem.

If this or any administration believes for a minute that small businesses like ours are going to our bank, cap-in-hand to beg overdraft facilities for the sole purpose of paying an additional inflicted tax, where payment is demanded at a few days notice, then think again.
 
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Comments:

Carson C. Cadogan:

"If this or any administration believes for a minute that small businesses like ours are going to our bank, cap-in-hand to beg overdraft facilities for the sole purpose of paying an additional inflicted tax, where payment is demanded at a few days notice, then think again."

Adrian let me take this opportunity to remind you and those who think like you. Taxes are a fact of life. I cant think of many people who like to pay taxes, but they have to be paid so that the Govt. of the day can run the country with all the benefits citizens and others, you included, enjoy. Under your last administration, the Barbados Labour Party, they imposed endless new taxes which we Barbadians are still paying up to this day. You cant dispute that. I have never heard you or any of your friends say that the taxes at that time ought not to be paid. Even the vat tax that you are complaining about was imposed by your Barbados Labour Party. If one fails to pay one's taxes there are penalties which you must suffer. Cast your mind back many years to an American situation. Al Capone ran riot in America with the Feds unable to reign him in, but they finally caught him on tax evasion. Likewise in Barbados they are tax laws and they penalties for not complying with those laws as you and the few others like you will soon find out.


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