Bridgetown.
The hotel sector in Barbados is facing an increase in Value Added Tax (VAT) from May1.
The Barbados Hotel and Tourism Association (BHTA) is warning that the increase could be disastrous for the sector with some hotels forced to absord the increase, while others will have no choice but to pass it on to their guests.
An amendment to the VAT Act paving the way for the levy to be raise from from the long standing 7.5 percent to 8.7 percent was laid in the House of Assembly late on Tueday night.
President of the BHTA Colin Jordan told Trakker News that the whole industry including restaurants and attractions will feel the impact of the 1.25 percent increase in the VAT.
"I am not saying that it is going to be disastrous, but it has the potential to harm the industry in two respects,one is that because of the way our contracting is done, some of our hotels will have to absorb the increase but a lot of them will have to pass it on" Jordan said.
He added that the cost of a vacation will become more expensive at those hotels that do not absord the the increase and this will affect business in a market that is driven by prices.
