"Illogical," a "mistake" and an "affront" are just a few of the words being used to describe Gov. Charles W. Turnbull’s decision to veto the proposed tourism authority and approval of a 2 percent increase in the hotel occupancy tax.
Hoteliers and business organizations in the territory lobbied Turnbull last week hoping that he would approve the tourism authority idea and veto the tax increase. Instead,he did the opposite. And that has the private sector asking where the governor’s "business-friendly" mantra has gone.
What has many people in an uproar is Turnbull’s veto of a proposal that would have replaced the V.I. Tourism Department with a semi-autonomous agency in charge of the territory’s tourism product. They also are upset that Turnbull, against the advice of hoteliers, increased the hotel occupancy tax from 8 percent to 10 percent.
"It’s a crime. It’s a tragedy. It’s illogical," said Wendell Snider, president of the St. Croix Hotel and Tourism Association. "The governor turned his back on the hotel industry."
Richard Doumeng, president of the St. Thomas-St. John Hotel Association, said Turnbull’s decisions were an "affront" to the tourism industry. He said that when a proposal to hike the cruise passenger head tax by $2.50 was proposed, there was significant outcry. The 2 percent room tax, he said, would average about $10 per stay and came without a single public hearing.
Beverly Nicholson, executive director of the St. Thomas-St. John Hotel Association, and St. Croix Chamber of Commerce President Carmelo Rivera said that increasing the occupancy tax at a time when airfares into the Virgin Islands are expensive is just another step in pricing the destination out of the tourism market.
"We are increasing the cost of a Virgin Islands vacation when impending airline consolidations will only raise already high airfares to the territory," Nicholson said.
Another aspect of the tax increase that has hoteliers fuming is that they have contracts with travel wholesalers that offer rooms at certain rates. When the occupancy tax was raised from 7 percent to 8 percent several years ago, Snider said not one wholesaler agreed to add the increase until it was time to renew the contracts, which are usually for a year.
"In today’s marketplace contractual agreements with hotels are set at least a year in advance. Increasing the room tax in the middle of the season will only wreak havoc with our travel partners and confuse the consumer," Nicholson said.
Turnbull said he vetoed the tourism authority because it would vest too much power in a community board without enough public-sector involvement. He also said eliminating the Tourism Department "overnight" was not prudent.
"We cannot overnight change from the current operation to a brand new authority without the necessary research and study to ascertain what is best for the territory," Turnbull said.
He said the greatest hindrance to the Tourism Department is a lack of funds to market the territory, hence the increase in the occupancy tax, which generates about $11 million a year.
In what appears to be a move to assuage the private sector, Turnbull is proposing a tourism advisory committee within the Tourism Department. The committee would be made up of the commissioner of Tourism and eight members appointed by the governor.
The vetoed tourism authority would have been structured like the V.I. Port Authority and the West Indian Co. Ltd. It would have had nine members — three from government and six from the private sector. All nominees would have been approved by the governor and confirmed by the Legislature. The board would have had the authority to issue bonds and would been managed by an executive director.
John de Jongh, president of the St. Thomas-St. John Chamber of Commerce, noted that the tourism authority proposal is recommended in the government’s five-year economic recovery plan. He said Turnbull’s offer of an advisory committee is like the governor saying, "We’ll let you in the room, but you can’t sit at the table."
He noted that WICO and the Port Authority are semi-autonomous and are playing important roles in the tourism industry.
"You already have the concept of these semi-autonomous agencies involved in tourism," he said. "So why is that bad?"
Snider said an advisory committee would have "no teeth."
"I sat on one in the Schneider administration to no avail," he said.
