The Puerto Rico Hotel and Tourism Association blasted the Tourism Co.’s stance on the proposed value-added tax structure the government is proposing as part of a comprehensive tax reform, saying the agency should “evaluate all aspects that will affect the hospitality industry.”
The trade group that represents Puerto Rico’s private tourism sector took exception to comments by Tourism Co. Deputy Director Luis Daniel Muñiz, who reportedly downplayed the effects the proposed 16 percent VAT would have on the hospitality industry.
PRHTA President Miguel Vega said the public official’s expressions were “wrong and unrealistic” because the sector will be directly affected in various areas.
“We want to remind the Tourism Co. that their role is not to defend the proposed 16 percent value-added tax but to evaluate the impact it will have on various sectors that make up our hospitality industry to illuminate the governor, legislature and the island,” Vegas said.
“The question that needs to be asked is what will happen with the other ramifications of the industry like casinos, excursion companies, tour operators, attractions, restaurants, and tourism products, among others. We need to be very clear that in Puerto Rico, the tourism industry is a conglomerate of many additional counterparts than just hotels,” he said.
The PRHTA said to be a complete and attractive tourism destination, Puerto Rico has to offer a varied product for diverse markets. This includes the luxury segment, a complement to the other areas of the industry, representing more than 1,000 rooms of the island’s total hotel room inventory. Puerto Rico’s main tourism markets are family, leisure and business travel.
“All of the niche markets the Tourism Co. promotes, such as medical tourism, groups and conventions, weddings, adventure and more, will be directly affected by the domino effect that this tax would implicate,” Vega added.
“The group and conventions business, which has been excelling in the past year, will be one greatly affected because there is group business already sold and closed in the books that will be coming to Puerto Rico in the next few years and it’s obvious they will be affected by the increase in costs,” he said. “It would be sad for cancellations from these negotiations to happen, that would mean taking a step backward.”
Founded in 1950, the PRHTA has more than 560 corporate members, among them large, mid-size and small hotels, restaurants, airlines and other businesses that serve the island’s hospitality industry.