Fiji tourism to feel rise in tax
The Fiji Times says that the rise in the hotel turnover tax that comes into effect from tomorrow could effectively remove Fiji from the competitive global tourism market.
The Fiji Visitors Bureau has braced itself for the negative impact the local industry is expected to receive once the hotel turnover tax that is levied on tourists increases from three to five percent.
Bureau Chairman, Patrick Wong said with Fiji already considered an expensive destination in terms of food and beverage such an increase of the HTT could see tourists turning to other competing Pacific Island nations and Asian countries.
Mr Wong said he could not understand the logic behind the tax increase especially since the tourism industry was still in recovery mode.
Mr Wong said the uncertainty caused by the interim government’s decision to increase the HTT would leave some wholesalers with no other option but to stop selling Fiji as a destination completely.
He said concerns have already been raised about the uncertainty in pricing by emerging markets in the Northern Hemisphere.
He said even though wholesalers in Australia and New Zealand are trying to bear with the changes, they will feel the brunt of the changes once all brochures and pricing on Fiji would have to be reloaded.
He said this was a similar situation experienced by the industry in 2006 and 2007 where some wholesalers just refused to sell Fiji.
Mr Wong said with tourism possessing the potential to pull Fiji out of the current deficit by its foreign exchange earnings, government was treading on a very thin line by casting a cloud of further uncertainty over the industry.
Mr Wong said the bureau had already advised government of the multiplier effect of the tourism dollar and the need to protect and facilitate the industry’s recovery.
“Tourism is a very labour intensive industry that employs everyone even unskilled workers so the tourist dollar goes a very long way.”
“But with such tax increasing the burden on tourists they could turn to other destinations that are competing strongly with Fiji.”
“The timing of this tax increase is just not good because the industry is still in recovery mode and selling packages at price point,” said Mr Wong.
Mr Wong said the tax hike would also impact on the industry’s ability to regain yield.
He said they had expected to improve the industry’s yield by July but with the rise in HTT would prove to be a hurdle hard to overcome.
A Report by The Mole from The Fiji Times
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