CuraƧao retailers protest sales tax hike as Venezuelan uncertainty looms
Willemstadās colorful Punda waterfront district. (Credit: Larry Luxner)
Economic difficulties in CuraƧao ā the largest Dutch-speaking island in the recently dissolved Netherlands Antilles confederation ā as well as political uncertainty in nearby Venezuela, are affecting retailers ahead of a planned hike in the countryās sales tax on luxury products such as perfumes, jewelery and electronics from 6 percent to 9 percent.
Shopkeepers in Willemstadās colorful Punda waterfront district say the end result is that CuraƧaoās Central Bank will receive less foreign currency from tourists, and that sales tax revenue will actually decline as a result.
They say only shops on board cruise ships would benefit, since the ships would be exempt from such a tax ā possibly pushing tourists to fellow Dutch-speaking island Aruba, where the sales there is only 1.5 percent.
āCurrently retailers are absorbing the 6 percent sales tax from our margins to sustain the duty free price structure, but with a 9 percent sales tax, it will be an impossible burden to bear,ā warned Meena Hemrajani of Le Rouge International B.V.
Aggravating the situation is the March 5 death of President Hugo ChĆ”vez in Venezuela, where the recent massive devaluation of the bolĆvar from 4.3 to 6.3 to the dollar has made everything much more expensive ā including travel to CuraƧao by the all-important Venezuelan market.
āNow with fresh elections around the corner, we will have to wait and observe its effect on the CuraƧao economy,ā she said, referring to the Apr. 14 presidential election pitting ChĆ”vezās hand-picked and heavily favored successor, NicolĆ”s Maduro, against opposition challenger Henrique Capriles-Radonski. āYet we have to hold down the fort and grow with aggressive strategies.ā
In the midst of such uncertainty, Le Rouge International will soon open a 310-square-meter shop under the name āThe Yellow House/La Casa Amarillaā in the heart of the Willemstad shopping district. The expanded outlet will offer perfumes, cosmetics, skin-care products, watches, fashion jewelry, sunglasses and handbags all under one roof.
Hyatt denied
A CuraƧao court has denied a bid by Hyatt Corp. and Hyatt CuraƧao NV to resume control of the former Hyatt Regency CuraƧao Golf Resort, Spa & Marina.
In December, Santa Barbara Hospitality NV removed Hyatt as manager of the resort, and renamed the property as the Santa Barbara Beach & Golf Resort CuraƧao. The company installed Benchmark Hospitality International as the property manager and announced Jan. 29 that it was open for business under the new name.
William Brewer, a lawyer for Santa Barbara, said: āIn our clientās view, Hyatt had proven that it was incapable of managing this property in accordance with the terms of the management agreement.ā Benchmark now manages the 350-room resort, which has 38,000 square feet of indoor and outdoor meeting and banquet space.
The owner claimed that under Hyattās management, the resort missed 2011 revenue projections by almost $12 million, and that occupancy rates were 44 percent, about 22 percent lower than expected. Both revenue and occupancy were lower than projected in 2012 as well, said the owner.
Smith Travel Research said in a report that in the 12-month period ending Oct. 30, 2012, occupancy at the resort was only 53 percent vs. almost 80 percent for the properties against which it competes. The average daily room rate in 2012 was $182.65, compared to $238.58 for its competitors, said STR.
