Did 2017 budget consider the new tourism thrust?

With the new board for Tourism Trinidad Destination Management Company (Trinidad Tourism Limited)  regaled in position after the first week of  budget 2017 presentation should conjure in our minds, a confident act by government toward a tourism diversification mandate. Intrigued by this motion, I questioned the financial and strategic measures of Budget 2017 that should meet the sector’s 2020 target.

The Minister of Finance in his speech introduced two destination companies: Tobago Tourism Agency (TTA) and TTDMC/TTL; which replaced the Tourism Development Company (TDC) . Incidentally, and not to confuse myself , I think we all need clarification which is the registered name for the company for Trinidad, thus, for the purpose of this article I would continue using both acronyms.

The reality is both TTA and TTDMC/TTL must ensure primary functions are committed to drive all elements of destination development in marketing, attractions, amenities, infrastructure, safety , to name a few. For those who may not know, this is no different from the previous mandate that was given to the TDC.

Now, with this separation of bodies, two years of standing committees and numerous consultants one should expect  funding  projected for at least five years with targets to be met for the re-positioning of Trinidad Destination and Tobago Destination. We should also expect to hear that some funding was put into place to take advantage of any impending opportunities that may arise. If this was done it would mean that finally we are at that level of thinking of a way forward in “Changing the Paradigm”.

Commendation must be made to The Minister of Finance for improving the incentive programme for the accommodation sector to retrofit inventory. It is expected that this fiscal support measure for improved Hotel and Guest Room Stock Upgrade Programme will take effect by December 1, 2017. However, industry stakeholders are mindful that these proclamations are sometimes without efficacy from poor implementation.

With an increased cost of living and taxation would a financial outlay with such an incentive be a gamble for a stakeholder especially as arrivals have been abnormally low? This brings me to the basic point on the law of supply and demand defined as ” the effect the availability of a particular product and the desire (or demand) for that product has on price“. Then the question is ,what is the government’s tactical approach that would be used to entice travelers to our shores; especially in times of our internal domestic issues (customer satisfaction, services, security, attractions, etc) ,and of uncertain global economy, regional competition , terrorism?

Based on the Tourism Road Map provided by the Government the intent is to continue the marketing trend of Trinidad, as a business destination. They proposed to focus on Business/MICE Tourism amid weaker corporate budgets. The plan also identified, “supporting niches identified included Festival Tourism, Sport Tourism and Ecotourism”.

The reason for continuing with this proposition has been taken from international data which proves that MICE markets draw many travelers and in turn higher tourism receipts for a destination. Therefore, from this proposition one should expect the Minister of Finance to discuss plans to build  infrastructure, such as a Convention Complex to facilitate this prioritized segment of market.  Obviously, it would be expected that TTDMC/TTL would put forward a substantial budget campaign to champion MICE for destination Trinidad. It behooves me whether anyone presented a  budget expenditure on marketing for stimulation of less than 400 registered attendees per convention. Can the Government attract high quality convention events that can promote trade and investor interests with such limitations?

As for attractions, the Minister indicated that Maracas Bay facility would be finished for 2018, hopefully as a comprehensive final product (Waste water and Water management , Improved water quality at the beaches, Improved food courts with sensible advertising, foot and cycle paths, playgrounds, established camp site area, parking, and facilities).

Now let’s review the tourism road map for Tobago which is focused on leisure, the same product marketing regimen as always, however the Minister of Finance cited Sandals as a key stakeholder to get Tobago leisure market back on the map. In the latest twist of negotiations , the government in a spurious act declared that an MOU has been signed to become the stakeholder inventory owner using the management and marketing brand of Sandals, moving away from the initial investor led relationship.  The minister implied that Sandals will be a success by using Hyatt’s model in Trinidad, without speaking on projections.  At this stage, I am perplexed with this notion, as Hyatt market is for a totally different source market. Why would government change from investor relationship to becoming the investor at a time when the funds from the treasury can be used to develop the island to entice more investors? Are we still at the level of a plantation mentality?

If the government is new investor, why build on no man’s land on the Golden Groove Estate? Have the minister lost sight that it is the government that owns Magdalena Grand, which was formerly a Hilton managed property, which at one stage sat as a white elephant? Why not hand over this property to Sandals?

It is also unfortunate that both locations at Lowlands and Golden Groove have a much needed  eco-system vital to protecting the island, areas where Government need to spend money. Where are the priorities of developing places of significance as a revenue earner where tourists can visit? The mystery and nostalgia of no man’s land is an actual revenue earner in itself, so why not consider making the mangroves healthy again to provide tours to these areas? All these can add to the distilled beauty of Tobago which is unique in its own right.

In my perspective the debate 2017 did not consider the proposed five year plan, nor did they put much thought in changing the paradigm for tourism. Let me share some of my suggestions:

  1. Reconsider the proposition for Trinidad with the focus of Culture/Events Tourism which ties in to our music and musical instrument (developing the pan instrument, pan yards) ; Developing skills in mas-making for our number one event product,  Supporting our diversity in culture and religious events; become the Caribbean fashion center. MICE markets can be extracted from this involvement and it would carve us with a definite Brand.  The supporting niche would be MICE, SPORT, ECO & AGRO TOURISM,CRUISE. It is an alternative to attract big spending tourists families with young children, working millennials, and active older travelers who are interested in new markets , new experiences;
  2. Improving talent through scholarships or negotiate for local tourism professionals to hold positions as assistant managers at government owned brand managed properties as the Minister is concerned so much with FOREX .Why is Magdalena Grand managed under an International Hospitality Company, under INVESTT while our national tourism professionals are being sidelined?
  3. Consider a convention centre for MICE markets and defer the sporting complex in Diego Martin. At present , the sporting complex need to be utilized effectively.
  4. Revisit Tobago proposition by introducing Eco. Consider building investor relationships for the tourism sector, where clusters can developed on the island. Perhaps the government can engage in our local pool of  businessmen who may want to invest in building a property and buying into a brand. Consider perhaps a hotel model which has a strong connection with Tobago cocoa, a great combination to recognize agro-tourism. Reinvest in building and  road management to involve cycling tracks and bicycle rentals and other eco interests as a way to drive revenue and entrepreneurship.

Frankly, I want to see the portrayal of a truthful reality toward strengthening the tourism sector, building people and country first.

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA, International Hospitality and Service Industry .
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com

 

 

 

 

 

 

Advertisements

Golden Seal of Approval

Recently I took a road trip around the islands of T&T where I noticed several properties prominently displaying “Hotels” and “Guesthouses”; but not a single property is registered with Tourism Development Company (TDC). Some properties flouting basic building codes and regulations; encroaching sidewalks,  adjacent to other buildings with waste water running freely into rivers and streams. We also visited  some of our popular beaches and rivers – a less than desirous state of affairs. Even at the lookout at Lady Young  there are food stalls without basic facilities begging the question of standards.

Which prompted me to ask – Which government agency is/was  responsible for our present state of compliance? Is it our culture at government agencies to disregard regulations? This brings me to the topic of regulations and standards that would make T&T compliant internationally and regionally.

The fact is , TTTIC (Trinidad and Tobago Tourism Industry Certification Programme)  was developed in 2001, derived out of the Tourism Master Plan,1995. This certification program was an MOU agreement valued over $3 Million as the basic project contribution, renewable annually thereafter,  between the Bureau of Standard (BOS) and TDC. The agreement was developed exclusively for operators in Trinidad which meant that Tobago and all International Branded Properties were excluded. The aim of the BOS was to implement a Tourism Certification System in Trinidad; and to certify Tourism Products in accordance with the Standards Act 1997.

One of the undertakings by the BOS was to develop, implement and administer TTTIC by which TDC provided impartial advice to the tourism operators and should be able to support any resolution of audit non-conformities. TDC also conducted joint public awareness campaigns, workshops and seminars in a partnership type relationship with the BOS. The nexus of this relationship  was to ensure that BOS was commissioned tostandardize the tourism product and to provide certification that will indicate quality products and services”

In effect quasi regulatory body as per national policy guidelines for operators registered in Trinidad under Tourism Development Company. Like most accreditation bodies, it is proprietary in nature and without fiscal injection it would in effect void itself – $3 Million plus annual costs flushed out the system that benefitted no one.

Nevertheless, TTTIC became de facto body of standards that placed significant pressure on operators (Hoteliers) in Trinidad to comply, noncompliance meant that they would be removed from incentive programs, marketing ,and business opportunities from governmental agencies. Fast forward to 2017, the Government now claims that TTTIC was “voluntary” blindly opening a doorway to a slew of legal action that can be taken against them by the association members for subverting the course of opportunities and incentives.

Some may argue that TDC’s powers were over quality assurance standards by facilitating inspections and licensing of tourism facilities . Indeed, this “power” fell under the Regulatory Framework aligned to the National Policy for Trinidad and Tobago. However, as the facts has shown, the proposition was skewed at the onset, which leads me to ineffective leadership and governance under TDC.

Now let’s address the recent decision to move from a Regulatory Framework that has cost taxpayers yet again,  to a new organisation,Trinidad & Tobago Regulatory and Licensing Authority (TTR&LA). I can only assume that the issues that arose with the regulatory framework were reviewed and this was the most feasible and cost effective approach to improve the amalgam of tourism products and services for both Trinidad and Tobago. Obviously some of the issues before overlapped with governmental agencies, such as Town and Country Approvals, Statutory Approvals, Environmental Authority, Local Government corporation , Finance and other related bodies.

According to Wikipedia,  a Public Regulatory Authority “is an executive branch of government , responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity“. A licensing authority “has the right to grant, suspend or revoke licensure or certification privileges“.

The message invoked here is that accreditation will become de rigueur with enforcement as prescribed by the laws of T&T, somehow managed by an organisation that is owned by the government. So besides improved properties (inland and coastal), the public should expect world class sites and attractions with facilities, aesthetic surroundings, improved transportation and service companies, higher concentration on environmental management which will in turn ignite possible investor relationships,not to mention a higher yield of tourism receipts.

What should stakeholders expect from the golden seal of approval – Perhaps higher ratings to attract tourist; More programs in Marketing and Promotion campaigns; Better Leveraging for business opportunities, Reduction of complaints; Higher Revenue; Lower costs for liability coverage; Lower loan rates; and other incentives.

Presently there is a Request for Proposal (RFP) online which reads, “The Government of the Republic of Trinidad and Tobago is undertaking an exercise to regulate and modernize the tourism sector towards developing same as one of the main catalysts in diversification of the national economy“. Already a misdirected communique which makes me wonder whether anyone in authority truly apply critical thinking to determine what is best for the the sector in T&T?[http://tourism.gov.tt/Portals/0/Documents/RFP%20Documents/RFP_RegAuthority_2017.pdf].

The RFP leaves much to be desired and clearly sends warning signs yet again to the very small and already pained tourist affiliated hive. At this point I cannot fathom how a regulatory and licensing authority is expected to modernize the tourism sector and inter alia. Furthermore by analysing this RFP, I have a plethora of questions as it relates to the public purse and the expected guarantee of value to us , the people of our beloved land.

As I applaud the Honourable Minister Shamfa Cudjoe on taking this bold step of implementing Regulations and Licence , I would suggest that the approach should be holistic rather than pigeon-holed. It may have been better to have R&L as a division under a product development authority. In other words a division for licence and regulations for Attractions, Craft Traders,Transportation Operators, Tour Operators, Rental Companies (Water Sport Rentals, Bikes, etc); and for various categories of Accommodation Operators. Other sub divisions to monitor services in quality enhancements, training and community tourism development , environmental improvements, etcetera.   It’s a tighter approach which would be under one umbrella with the sole purpose of managing the product development of the islands.

https://revolutiondestination.wordpress.com/2017/04/17/golden-seal-of-approval

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., A Tourism Consultant with 20 years as a practitioner in the Hospitality and Service Sector, Member of THRTA, International Hospitality and Service Industry .
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com

 

 

 

Why dissolve TDC?

Tourism is at the front burner again when Honorable Minister Shamfa Cudjoe announced the dissolution of TDC (Tourism Development Company) at a recent post cabinet meeting. The minister indicated that two authorities would be developed;  “one will focus on Trinidad while the other will focus on Tobago” and if no one else was paying attention, a third authority is to be developed . This third entity as the Minister stated would be  “a regulatory authority which will set basic standards for all tourism operators” , a topic to be discussed in another article.

Sadly, what appears to be disreputable is the appointment of an Interim CEO , TDC on 8th March,2017 and then a notice of dissolution of TDC on the 9th March 2017. According to a news report, The Honorable Prime Minister Dr. Keith Rowley has affirmed his decision together with his cabinet on the ideologue of the two authorities, in a bid to improve tourism. A decision made without consultation with the Communications Union Workers , contracted employees and sector stakeholders. Within the past few weeks the public and stakeholders have ventilated concerns without being informed of the timeline, the vision or measures that the Government will take.

Let me digress a little on the facts of our existing established tourism organisation :

  1. Tourism and Industrial Development Company (TIDCO) was split into two entities; one with a focus on Tourism and another on Investor Development (see articles on  TIDCO ). The reasons for this separation seemed similar to Hon. Minister Cudjoe’s response on TDC. In May 2005, a special purpose company was formed as the implementation plan to the national policies. The Tourism Development Company (TDC) sole purpose is to develop and market the tourism product of Trinidad and Tobago;
  2. Tourism Development Act 2000 was developed which governs the policies for the industry in other words, The  Tourism Act is the foundation of legislation to facilitate Tourism Development for Trinidad and Tobago
  3. Draft plan of National Tourism Policy of Trinidad and Tobago commenced in 2003 and completed in 2007; Cabinet approved 2010. This present national working policy framework was derived from various developmental and economic plans that existed between 1995 to 2008.
  4. The THA Act No. 40 of 1996 incorporated a Division of Tourism as the main arm responsible for the destination marketing of Tobago;

These four(4) official documents were drafted for TDC, THA and The Ministry of Tourism to function and operate in congruence with one another. The crux of the matter is that the national policy was approved 5 years after TDC was formed with “old guards” transferred into the new system. Naturally, the system of governance forged within the organisation became the status quo as no one monitored performance of the organisation. Then there is the inherent power struggle with marketing campaigns and budgetary appropriations between TDC and the THA , a telltale sign of disunity.  This breakdown is further compounded with poor leadership, bureaucracy , nepotism , complexities of superiority, and the list can go on and on.

It is inconceivable that after 12 years with established legislation that TDC have failed one of the most fundamental exercises of branding the destination of Trinidad and Tobago. Not to mention that the branding exercise , drafted in policy and strategic plan/s of destination of T&T was irrationally transferred to InvesTT. At this point my guess is as good as yours when it comes the purpose of the existing legislation- an apparent written document to be comforted by. 

Based on facts above, I am of the perspective that there is need for reform of TDC and the Ministry of Tourism considering the dysfunctional structures of the non-existent TIDCO and the present functionality of TDC.

What is fundamentally critical to note is that tourism is always evolving with new concepts for investor development; new trends; environmental, social and economic changes; new accommodation concepts (ie. Pop ups) to name a few.

Now that the Government has also engaged in Tourism Authorities shouldn’t they also review the Act? What would be the changes made to the Ministry of Tourism? Would the policy be amended ? What is the master plan for the authorities? Does the Government have a plan to secure talent without “friends or family” involvement?  What would be the spend and would the budget be apportioned for the authorities? Which entity would be responsible for branding the image of the islands ? Would each entity use marketing and tactical campaigns of each island tourism products? What is the intention for branding the destination? What is the Government spend to dissolve TDC? What is the budget for creating three entities?

As I close I believe that the public and stakeholders need to understand the intention of the Government with these three new entities so that there are no misconceptions to the present and/ or future state of tourism.

Why dissolve TDC? Please note that the logo is a copy of that used for TDC site . Used (unofficially) for this article based on topic.

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA, International Hospitality and Service Industry .
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com

 

 

Sandals – A vacation option for Tobago

Finally, the word is out and in the public domain that the government of T&T is in negotiations for a proposed 750-room Sandals Resort in Tobago. This development project is presently before cabinet after months of silence by government and officials within THA despite the skepticism raised by the local populace .

The Sandals project is expected to change the landscape of the tourism industry for the islands by increasing room stock inventory in Tobago, improve the quality product being offered, stimulate training, and increase airlift to the island. Granted the benefits are obvious but there are also questions that resonate: What is  the expected percentage of skilled workforce from the islands that is required to service the sector?   Can our local agriculture suppliers supply quality goods to the industry? Would community craftsmen and tradesmen provide timely, reliable and quality service ? Is the island prepared to manage carrying capacity concerns of our sensitive resources?  Would there be a labour law review for the sector to comply? What policy is in place for local investors wanting to do mega project developments on the island- would the same incentives apply? These questions allude to the fact that government must have a master plan for hotel and coastal development on the island with measurable research and development to evaluate the tourism receipts necessary to drive the economy.

Essentially, Tobago is no stranger to All Inclusive’s (AI) as this destination has been predominantly sold by travel agents selling  pre paid packages to European and British source markets.Studies have shown that the AI concept was novel in the late nineties offering travelers a pricing model which encouraged mass tourism to the destination. This concept has grown into trending resorts, that is : Golf , Spa and Health , Family or for Couples. The irony is AI resorts offer major incentives for guests to stay within the safe and protected confines of the property which disconnects the guest to the destination.

Properties established as AI in Tobago are Grafton Beach, Coco Reef, The Grand Courlan, Blue Haven , Rex Turtle, Magdalena Grand, to name a few . The difference with these properties is that they are much smaller in comparison to the larger AI’s, such as Sandals in this case,  thereby giving the visitor the ability to enjoy the destination as well.

Basically, Sandals Resort present to Tobago, a hotel-brand product differentiation, which capitalizes on the core natural resources of the destination to maintain an attractive and promising position for its marketability.Of course, Sandals can be promising for Tobago as it belongs to the top 5 major All Inclusive (AI) chains worldwide  and  known as the most romantic property in the Caribbean region. The exquisite layout design, high quality and price , top customer service offering at least five international restaurants, entertainment and activities would supersede what is presently available on both islands.

Naturally, it would be expected that existing service and hotel operators become more competitive to maintain marketshare; and that government spend to improve sites and attractions, airport services , incentive plans and environmental policies- a  conversation for many years!

This is where I  concur with the article by Kathleen Pinder ,“What’s best for Tobago tourism?” and beseech the Government to consider neighboring islands Antigua ,Barbuda, Grenada, St Lucia, Bahamas to understand negotiations with AI investors in accordance to the alignment to  the tourism master plan , notwithstanding the policy framework for the island of Tobago. Furthermore, there is also a concern about the  benefits from AI resorts to these destinations, as most times monies are leaked through ownership rights , goods, and services.

So it would be necessary to present a framework plan first as all-inclusive’s is simply a small segment of destination competitiveness, which cannot be misconstrued for a destination marketing plan to emerge on the world stage.

Another concern was expressed from an online petition made against the Government is a rumor that Sandals AI Resort have been offered  a large environmental footprint of natural reserve, known fondly by locals, as No Man’s land-the soul of the island.

According to world indicators from international tourism forums, the top destinations that travelers are seeking offer authentic travel ,voluntarism and community integrity and cultural connectively. In other words, the uniqueness of destination Tobago is what the 21st century traveler is looking for- that little piece of paradise.

Tobago is in a position to differentiate from the rest of the Caribbean and therefore tourism advisors should encourage the push theory in responsible sustainable tourism planning in the tourism vision framework – focus on the mangrove rehabilitation programs at low lands and at No man’s land ; consider recycling programs , sewerage and water treatment; develop the authenticity of cultural heritage programs and local cuisine; add more foot paths and cycle paths ; improve craftsmen ;improve farming; improve services and sites;  reduce crime , noise and refuse.

Consider Maldives, a little island considered one of the top luxurious destinations in the world having maintained her environmental foot print and destination differentiation in the world. Maldives have taken into consideration the sensitivity of the environment in their framework: Integrating tourism sensitivity by engaging public /private meetings; Encouraged developers to compete to increase standards of accommodation and services; Provided legislation to control development of resorts through Environmental Impact Assessment; Negotiated with resort owners to Install Plastic Compressors,  Incinerators to manage waste and Sewerage Waste Management; Encouraged AI resorts to manage water supply without interference of water reserves; Ensured that land developers purchase local material and construct by visually blending with the environment; and Provided allocations of  20% for building, height restrictions, beach allocation of at least 20% for public use.

In my perspective, Sandals is great as a vacation option for Tobago as there exist a synergistic fit for Sandals romantic getaway resort with the sultry beauty of Tobago. But I will reemphasize  here that resorts are more successful when planned within the  tourism framework of the destination. So let’s be clear, another vacation option in Tobago is long overdue and it is expected that negotiators have a feasible projection for the islands financial, social and  environmental growth.

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA, International Hospitality and Service Industry .
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com

 

 

 

 

 

Is poli-tricks stifling tourism?

One of the components within the pillars of tourism is leadership and its congruent relationship among the ministries, associations, and government to foster growth. Within the past few years,  T&T witnessed a game of “musical chairs” for the seat of Chairman within the Tourism Development Company (TDC); and a game of “reshuffle” for the post of Tourism Minister.

The latest uproar in tourism, was the termination of the sitting chair of  TDC on the basis of loss of confidence by the Directors of the Board. The Chair, having worked closely during the campaign with the now sitting Minister of Tourism, fearlessly spoke out citing issues of poor corporate governance.

With that being said, Mr Afra Raymond’s article “Board Games”[Trinidad Express, 2016,May 29] stated that ” The lack of an open process for selection of State enterprise board directors means that the entire arrangement can be seen as “Grace and Favour” appointments, in which certain persons are favored over others.”  

Where does the fault lie?  How transparent are these institutions with hiring policies, performance evaluations/ metrics in order to get the job done, if the credentials of candidates holding the position as Director, Chairman, GM, CEO, Advisor, Specialist, or even the Minister, are limited in their knowledge of the industry. Sadly, the few remaining stalwarts in the industry who are available to add value may possibly be  weathered with the ups and downs, and political bias from obscene nepotism, to be actively re-engaged.

In actuality, when Ministers are reshuffled, they would realign the offices of the Permanent Secretary  and the Chairman because of two main reasons: 1. To ensure that they have loyalty and ; 2. That personnel must follow instructions according to personal or political agenda. So, what is the political agenda?  Who is instructed to deliver the agenda?  Who is expected to benefit from the agenda?  Should  the government past and present be blamed, after all, leaders have changed and political agendas have changed?

Unfortunately, the turbulence that occurred over the years have stifled TDC via mandates from the sitting Minister to abandon,manipulate,suspend or ignore actions to be addressed by the board, suffice to say , nothing tangible would be derived for the industry. When last has Tourism actually realized its significant contribution to GDP, given that there is a strategic plan in place?

Let me refer to an article written by Shaliza Hassanali headlined “PP, PNM treated tourism as bastard child”[May,2016]; which gave viewpoints from former officials who held public posts. Firstly, it pained me to read a headline that the industry is perceived as a “bastard child”. It is irresponsible for anyone to echo such an asinine statement especially someone who held public office.

TDC is a well funded special purpose company established in 2005, however, “Ah eat ah food”   seemed to have been the modus operandi for this Ministry, as no one paid attention to the non lucrative returns.

Simply put, the focus by Government have always been on the energy sector because of its fiscal contribution to T&T’s economy. Agreeably, the Tourism industry can contribute billions to the national GDP  but again, who would be the lead to take charge  without pursuing avenues for profiteering?

From my nebulous recollection from past budget reviews, government allocate billions for initiatives and plans as advised by consultants and advisors, collectively for THA ,TDC and MOT.  That being said, what has been the outcome of the monies that was spent over the years as there has been no measurable growth in arrivals.

What is our position on branding? What is the position at Maracas Beach? Why are there issues with Lion House being in disrepair? Why is sponsorship given without metrics? Why is there a convention bureau fully funded by Government? Explain the rationale for the recent spend of marketing dollars for “Soca on the Seas” on Royal Caribbean vessel from Miami to Bahamas? – I shudder to think it’s because the promoter is Trini to de bone! 

According to the article by Hassanali, the sitting Tourism Minister stated ” Right now the government has instructed and is conducting a review of the ministry and the TDC arm of the ministry. We have a regional consultant who has been meeting with the staff in TDC…”. What does this mean?   Which framework is being adopted?  Why are standing committees being re-created with members whose aptitude is not within the sector? Is it another wishlist report to be generated as in 2011, and 2005; and possible training for the committee members to understand the industry.

Therefore in my perspective,if corporate governance is compromised in a state enterprise then that is a critical area to be addressed. Furthermore, if  leadership which includes the players at various tiers in the industry are irresponsible and unaccountable  to the sector then tourism will never be a pivotal pillar for diversification. It is strongly recommended that poli-tricks take a back seat to effectively reshape the landscape for tourism to prosper.

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com

 

 

 

 

 

Weighing in on Online Tax Levy

unfair Screenshot 2016-05-15 20.29.51The recent mid year 2016 budget review by the Minister of Finance indicated that by September 2016, all nationals of Trinidad and Tobago (T&T),purchasing goods and services via online transactions with retail companies overseas, will be subjected to a 7% online tax levy. The Hon. Minister Colm Imbert, suggested that the tax levy is necessary to reduce the foreign exchange leakage; and should assist local companies with improving their competitive advantage.

As noble as this sounds , how would this tax levy be applied?  The Minister of Finance in his contribution stated that New Zealand has an online tax levy in place –  a possible model for T&T.

Let me digress a little to give clarity on the terminology used in the budget review statement so that one can relate to my perspectives later in this article. According to http://businessdictionary.com, “The most basic products of an economic system that consist of tangible consumable items and tasks performed by individuals. Many business portfolios consist of a mix of goods and services that they offer to potential consumers via a sales force”,   a common definition for Goods and Services. A retail company is defined as “businesses or persons that sells goods to the consumer”.Finally, the definition for online shopping is “a form of electronic commerce (Business to Consumer) which allow consumers to directly buy goods and services from a retailer over the internet using a web browser”.

The online retail mix offered to an e-consumer as explained by researcher Neilsen, is also thought provoking, as consumers who purchase online want ease of shopping, convenience, price and range of product offerings.

Neilson suggests that the class of the product mix is much broader for e-consumers. There is a range of product mix of tangible goods such a:Clothing/Shoes/Accessories, Books/Magazines,Music CD/Videos/DVDs,Health and Beauty,Toys,Sports Equipment, Hardware and Garden Supplies,Food,Furniture and Housewares,Electrical and Electronic Items,Recreational Goods,Parts,Vehicles.

Many contributions have been written by analysts about the unfairness of the levy on tangible goods, as consumers would be taxed  custom duties, vat,and now a 7% levy on the total tax on the purchase price.

Outside of the physical goods there are also services that is offered to the e-consumer related to: Airline Tickets,Travel Related Services (Taxis, Hotels,Restaurants,Tours),Entertainment (concerts, etc.),Education (online training),Online Support Services,International Consultancy Service Providers (Human Resource Management Teams, etc),Other.

As a practitioner in the tourism industry, we have established relationships with international suppliers for several items that we regularly purchase for the running of our operation. For example, executive room menus, electronic key cards and replacement parts, wall hair dryers and replacement parts, to name a few. These items mentioned are goods, that are tangible, which cannot be obtained in Trinidad. With the sophistication of technology in the world of commerce, we are now able to look at various products and brands via online stores before we make our purchase.

What about intangible purchases, otherwise known as “services”, as it relates to the statement made in the budget? The tourism industry, is service oriented and likewise we also purchase intangible services. For instance, CHTA ,CEDDAT and other caribbean linkages that are affiliated with the THRTA association provide e-training opportunities.  We also pay for electronic system support, software support, and the most common is payment for online sales commission to travel related services (Expedia, Booking,Regatta,Hospitality Supply). Therefore as an e-consumer, hoteliers are purchasing a product mix on goods and services,based on a wider range that are available internationally.

As the Government speaks to controlling foreign exchange leakage, then one must consider InvesTT, property management of government owned / public sector companies such as: Hilton, Hyatt, Magdalena, etc., and its accounting structure. These government investments are all managed by international management companies and international consultants, paid for by taxpayers.  These service companies, external to Trinidad have a foreign franchise fee and human resource management fee for services rendered. Branded properties, are also mandated by contract to comply with international operations whereby  goods are imported into T&T to reinforce brand.

Therefore, it is debatable on how the government intends to apply online tax levy on the tourism industry in an effort to prevent foreign exchange leakage or to improve competitiveness in the marketplace.

Like the banking sector, the tourism industry should seek clarification on how the tax levy will affect the tourism industries financial performance. AMCHAM, in a recent press release offered advise of a de minimis, which i would support for my personal spend as the figure presented was certainly conservative. However, the accommodation sector spend can be about USD $5000.00 for a mix of products and services and this is conservative for small service related operators. What about the other related travel businesses who would import special purpose vehicles over USD$30,000.00 from an online car company?

My view is that it is impossible to use New Zealand’s online tax model to fit T&T, as systems, economic structure, trade relations, availability of goods and services, importation duties, size of population and other variables are by far different. Ideally,  T&T should offer more trading of goods and services internationally to bring in significant foreign exchange, rather than taking this taxation approach, especially as customs and excise duties on goods has had several controversial issues.

Therefore, in my perspective the taxation online levy can have serious long term repercussions on the tourism industry if not thought out, to be properly administrated. Perhaps, an  immediate tax rebate on any online purchases made by an approved operator can be a consideration for the sector. Otherwise, it would be difficult to comprehend the competitive advantages for business operators in the tourism industry.

 

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA,
Follow WordPress: Revolutiondestination ; Gmail:revolutiondestination@gmail.com