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Tourism committee accuses three local hotels of overcharging guests


November 8, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

Combining room tax with hotel fees can mislead tourists who believe the whole line is a tax.

The House Tourism Committee, headed by Rep. Sylvia Corujo, has accused three local hotels—Wyndham El Conquistador Resort & Country Club, the Caribe Hilton, and Best Western Pierre—of misleading their guests with regard to the amount of room tax they must pay.

Corujo, committee chairwoman, said last week that she is interested in amending the Room Occupancy Tax Law to require that the government-imposed room tax be clearly identified on the guest bill and that the failure to do so can result in an up to $25,000 fine. The issue of the room tax not being clearly identified on the local hotel bills isn’t a new controversy. Puerto Rico Tourism Co. executives had contemplated amending the law last year, as reported by CARIBBEAN BUSINESS (CB May 4, 2000).

Jose Campo, general manager of the Caribe Hilton, argues that his hotel does not mislead his guests by merging the government tax and the company’s resort fee.

"We [Caribe Hilton] began charging our guests a $6 per-day resort fee because we began offering complimentary coffee, newspapers, and access to our tennis courts and fitness center," Campo said. "Our resort fee is clearly identified in a separate line on our bill."

Puerto Rico’s Room Occupancy Tax Law requires <I>paradores<I> to charge a 7% room tax; hotels without casinos charge 9%; and hotels with casinos 11%. Room tax revenue has been used to help finance the development and construction of island’s Convention Center.

According to the House Tourism Committee, an informal survey of nine hotels conducted on Sept. 5 determined that three hotels, after being warned by the Treasury Department during a hotel audit in May, continue to merge surcharges with room taxes for combined taxes of 22% and 15%.

"This practice damages the island’s image in tourists’ minds because they get the wrong impression that room taxes here are too high," Corujo said.

In previous years, tourists have complained to the Tourism Co. in letters about having to pay higher government taxes at particular lodging companies in Puerto Rico, particularly at Wyndham properties.

Over at the Wyndham properties, guest bills reflect up to 22% room tax and tariff (not separating the government’s room tax from the one charged by the resort).

In a previous interview with Richard Cortese, vice president of Wyndham Resorts, said El Conquistador charges a 22% room tax and tariff and that 11% is government tax and an additional 11% is in-house tariff for amenities given to guests who stay at the property.

Amenities also charged by El Conquistador include complimentary coffee, health club access, bottled water, and ferry transportation to Palomino Island, among others.

Paying hotel taxes is common in the Caribbean as well as in the U.S. mainland. These taxes are growing in popularity as a funding source for convention centers and convention & visitors bureaus.

In the U.S., hotel taxes are creeping upward in an effort to shift the tax burden on new projects from local residents to out-of-towners.

However, industry observers say excessively high hotel taxes can drive away business. Meeting planners are more concerned about hotel taxes than they were 10 years ago because taxes have gotten so high.

Puerto Rico is still competitive with regard to its government-imposed room taxes.

On the U.S. mainland, the cities with the highest hotel room taxes are Houston with 17% room tax, San Antonio charges 16.75%, Columbus, Ohio with 15.75%, Seattle with 15.6%, Anaheim, Calif. with 15%, and Dallas with 15%.

As for the Caribbean, Trinidad and Tobago’s room tax is 20% (including a 10% service charge and not including a 15% consumption tax); Curacao charges 19% (including a 12% gratuity); Aruba charges a 17% room tax (including 11% gratuity); and Jamaica charges a 6.25% room tax (not including a 15% general consumption tax).

This Caribbean Business article appears courtesy of Casiano Communications.
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