On May 24th this year, a new Government was elected in Barbados led by the Honourable Mia Amor Mottley. On June 11th the Prime Minister presented the first mini-budget to the island. The announcement advised of several strategies to raise revenues to assist with the overall national improvements required on the island. One of these initiatives is the implementation of a Mandatory “Room Rate Levy” to be charged to all visiting guests staying on the island from July 1st 2018 onwards.
It has taken a little while to get the details sorted for the Villa and Apartment Rental product. Clarification is still being sought on various items but the Barbados Hotel & Tourism Association (BHTA) has today, June 27th 2018, outlined and shared the details with us.
Effective July 1st, 2018 Government will introduce a Room Rate Levy (RRL) on Accommodation. This Room Rate Levy is to be charged on EXISTING bookings as well as on new rentals. The villa companies met with the relevant Government authorities in an effort to have this apply only on new bookings but it was denied, therefore we must collect this Levy from our clients. We stress that this is not a Company policy but a Governmental mandate so we have no choice but to comply.
The Room Rate Levy is understood to be 2.5% of the nightly rate, capped at US$10 per bedroom per night, therefore you pay whichever is less.
A 3 bedroom villa rents for US$700 per night in the summer
You are staying for 5 nights
$700 x 2.5% x 5 nights = US$87.50 RRL
Which is less than 3 bedrooms x $10 each x 5 nights = US$150 RRL
You pay the lesser amount, US$87.50 RRL
Plus the 7.5% VAT (tax)
A 6 bedroom villa rents for US$4,000 per night in the summer
You are staying for 7 nights
$4,000 x 2.5% x 7 nights = US$700 RRL
Which is more than 6 bedrooms x $10 each x 7 nights = $420 RRL
You pay the lesser amount, US$420 RRL
Plus the 7.5% VAT (tax)
For those guests already in Barbados, whose stay ends after July 1st 2018 – you too are required to pay the Room Rate Levy for each day you are on island from July 1st. A representative will be collecting the tax due from on island guests prior to departure.
Moving forward, we will be including this new Room Rate Levy in all of our new quotations, however, for clients due to arrive and stay from July 1st onwards, even though you have already paid for your rental in full, unfortunately you will have to pay the Room Rate Levy for the duration of your stay, on arrival in Barbados.
For our clients who have not yet paid their balances, and where balances are due within the next few months, we have no choice but to add the RRL to the balance due.
We know having to ask our clients to pay more on accommodation already booked and paid for, either in part or in full, is an unwelcome request, but this RRL is a Government policy that we are mandated to adhere to and is beyond our control.
Looking further ahead, it is also understood that effective January 1st 2020 the current 7.5% tax (VAT) rate will increase to 15% on those villas and apartments that are VAT registered. We will send out further communication on this as we get closer.
And from October 1st 2018 an Airline Travel & Tourism Development Tax of US$70 will be paid by passengers flying outside of the CARICOM (Caribbean Community). This will be charged to all departing passengers and will be payable at the Airport. Again, we will send out further communication on this as we get closer.
We thank you our valued clients for your understanding.
June 27th 2018