Opinion: St. Maarten Room tax

POSTED: 10/29/13 2:56 PM

The draft legislation designed to up the room tax for stay-over visitors seems to be long overdue. It will still take some time before any change to this legislation will go into effect and we are looking forward to a healthy discussion about this issue.

Changing the room tax from around $7 to $10 a night may come across as a more than 40 percent tariff hike, so the government may have a communication problem there that could easily backfire.

If stay-over visitors, who are crucial to the local economy, feel that they are being robbed – and we are not saying that this is the case – they could easily decide to bid the island farewell.

Realistically however, the tax-increase is nothing more than a correction for inflation. Everybody will understand that and put up with it.

Nevertheless, it seems a bit of a shame – if not a case of unfortunate timing – that a draft initiative law for a tax hike arrives before some decent repair is done to timeshare legislation. Such repair would offer protection to timeshare owners and to prospective timeshare buyers.

This industry has had its share of bad news over the past couple of years. That has not gone unnoticed in the most important source market – the United States. In spite of all the bad news that resulted from the Pelican Resort saga and from the ugly lawsuits Diamond Resorts is still entertaining against some of its timeshare owners at the Royal Palm Beach Resort in Simpson Bay, many Americans have stuck faithfully to their favorite destination under the sun.

Thousands of timeshare owners have turned their backs on St. Maarten – if claims from the Simpson Bay Resort are to be believed. Furthermore, we read regularly that owners are offering their timeshares for sale for prices that are way below market value.

Still, the amendment to the room tax for stay-over visitors offers an opportunity to kiss and make up, especially to timeshare owners that spend a large part of the year in St. Maarten.

The initiators of the legislation have their eye on one particular ball – higher tax revenue. Such a strategy could easily backfire if this group of timeshare owners feels that they have become the country’s cash cow.

So why not make a gesture? Why not offer timeshare owners that share a long history with the island and that spend a lot of months here a discount? After all, these visitors have already pumped a lot of money into the economy: they do their shopping, they rent cars, and they visit restaurants and bars. Offending this group by charging them pound for pound for each night they spend on the island feels like bad marketing.

Fortunately, the draft initiative law is not written in stone, because it will still have to go through a debate in parliament. When that happens, we will soon know what the sentiment of our politicians is towards our most precious visitors.

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