NASSAU, BAHAMAS — A leading businessman is urging the government to extend incentives in the Hotel Encouragement Act to Bahamian homeowners for short-term rentals.
Mario Carey, chairman and founder of Better Homes and Gardens MCR Bahamas, says that the change would not take a slice out of the hotel industry, but help satisfy the demand for accommodations that cannot be met.
"The operators of large hotels all understand that the short-term rental market - Airbnb, VRBO, HomeAwayfromHome - is here to stay," said Carey. "They've been adamant that government needs to collect VAT on those residential properties that are being used as an Airbnb, for instance.
"What I'm suggesting is that if that same property is being taxed and considered a part of the hotel inventory and a commercial entity, it ought to be entitled to certain rights and benefits and those benefits will generate an amazing amount of activity throughout the economy."
Mario Carey
Carey suggests that such rights accrue to Bahamian property owners who could choose either to take advantage of a revamped Hotels Encouragement Act, or be exempted from VAT if the proceeds from short-term vacation rentals fall under a stated amount, just as other businesses with less than $100,000 revenue are exempted.
According to Carey, the trickle-down effect will drive sales of everything from furniture, appliances and paint to fencing, landscaping and pool construction materials. The greater the ability to satisfy market demand, the greater the benefits will be for taxi drivers, rental car companies, restaurants, attractions and excursions, he said.
Higher participation of quality offerings will pave the way for more people to participate in the fast-growing segment of the tourist economy, Carey believes, keeping The Bahamas competitive in the hospitality industry.
"This will feed into a broad cross-section of economic activity by driving up the value of property, and in some cases, moving it to the category of highest and best use of the property. The more money flowing in the economy, the greater the overall impact - from what people spend in the food store to what they spend on major consumer goods and services," he continued.
"The additional income can make a difference in a family's ability to put a child through college instead of urging them to finish school and find a job. The economic and social impact derived from this market segment can increase the prosperity of the Bahamian people," said Carey.
"I just want to find avenues to uplift Bahamians and tourism is still the engine that drives our economy. Greater participation not only benefits more Bahamians, it provides for a better visitor experience which, in turn, drives more visitors through positive reviews and increases repeat visitor numbers. It is a win-win for all."
Last month, Parliament suspended debate on the Tourism Development Corporation Bill 2023 as an association representing vacation rental owners in the country is seeking to offer its recommendations to the legislation, which it said lacked industry consultation.
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