Incentives for investments in tourism projects are already in place under the Tourism Development Act (TDA) Chapter 87:22 of 2000, and an eminent review of existing incentives could see an even more robust incentive framework take shape for the tourism sector in Trinidad and Tobago.
The TDA of 2000 sets forth a range of incentives to investors in the form of tax, Customs and excise duty exemptions for operators of various types of tourism projects deemed to have the potential to contribute meaningfully to the growth of the sector. Section 3 of the TDA provides the country’s tourism operators with a tax exemption on gains or profits for a period not exceeding seven years; a tax exemption on gains or profits from the initial sale of a villa, condominium or site which forms part of an integrated resort development; an accelerated rate of depreciation of equipment; and a capital allowance for approved capital expenditure incurred in the establishment of a new tourism project.
Under section 22 of the TDA, investors must obtain a permit to import building materials and tourism equipment free of Customs duty and/or a permit for the purchase with the privilege of a drawback of Customs or excise duties. Moreover, section 4 of the TDA includes an incentive for tourism transport service vehicles, which entitles investors to a licence to import vehicles with the payment of Customs duty at the rate of 10%, payment of value-added tax at the rate of 12.5% and exemption from the payment of the motor vehicle tax. The incentives apply to projects in areas including accommodation, tourism activities, infrastructure, transport and ancillary services.
Alongside the incentives provided under the TDA, since 2010 the Tourism Development Company (TDC), the MoT’s implementation agency, has also overseen the Tourism Accommodation Upgrade Incentive Project, which provides an incentive to tourist accommodation upgrade works for small and large properties (between one and 150 rooms) in the form of a partial reimbursement of the costs of capital works undertaken.
Under the programme, small tourism accommodation properties (1-5 guestrooms) are eligible for a 20% reimbursement up to a maximum of TT$75,000 ($11,600) for upgrade work conducted on the interior or exterior of the property, while larger hotels and guesthouses (6-150 guestrooms) are eligible for a reimbursement of 25% up to a maximum of TT$750,000 ($116,000). To qualify properties must meet certain requirements, including having been in operation for more than four years, among others.
The tourism accommodation upgrade incentive aims to raise the standard of T&T’s accommodation stock, estimated at 7768 rooms. According to the TDC, from 2010 through to the end of 2014, 134 properties with a total of 455 guestrooms benefitted from the programme, with reimbursements reaching TT$2.4m ($370,000). Since January 2015, when the programme was upgraded to include more areas of a property and smaller operators, eight properties of between six and 150 guestrooms have taken advantage of the incentive, though that figure is falling short of expectations.
Authorities hope the incentives will attract investment into key areas. One area set for development in the near term is Invaders Bay in Port of Spain. Colm Imbert, minister of finance, said in April 2016 that the government was in discussions with foreign investors on a set of integrated projects for Invaders Bay, one of which was a five-star hotel and convention centre. The government is also set to review a delayed investment project for the area, the Invader’s Bay Development Project, on hold for nearly five years.
Another area the authorities are looking to develop is the Chaguaramas Peninsula, north-west of Port of Spain in Trinidad. The development of the peninsula is guided by a 15-year master plan, which envisages four main clusters including: mixed-use entertainment; industry and innovation, with a focus on maritime and yachting industries; marine eco-activity, including research and hospitality opportunities; and nature and recreation, with a focus on agri-tourism and art development.
The development of the nearly 6000-ha peninsula is overseen by the Chaguaramas Development Authority (CDA). An essential part of the plan is the multi-phased construction of the boardwalk area, which will facilitate the establishment of restaurants and other businesses. As part of the revitalisation plan, in March 2015 the CDA announced it had leased the Chaguaramas Hotel and Convention Centre to a hotel management company to develop, manage and operate a four-star hotel. The 30-year lease is worth TT$30m ($4.6m). The peninsula has 607 ha of flat land available for lease and features a golf course, and almost 13 ha for villas and a resort complex.
Situated off the coast of the Chaguaramas Peninsula, 7 km from Trinidad, the Chacachacare Island has also been identified as a potential site for investment. According to invesTT, the investment promotion agency, the island has 392.6 ha of land suited for the development of an integrated resort in the luxury segment, with the potential to accommodate a range of activities and facilities. The island boasts a tropical rainforest, a salt-water pond and beaches, with existing infrastructure including a paved road, a docking facility and a jetty.
In Tobago the Golden Grove Estate in the island’s south-west, overlooking the Buccoo Reef National Park, is another area suitable for the development of villas, luxury hotels and resorts. The site offers easy access to Bon Accord Lagoon, mangrove and wetlands and is thus a prime leisure and ecotourism attraction. The site is privately owned by Occidental Investments and Oceanic Properties, with 30% of the estate (120 acres) approved for development.
The country offers a number of advantages to prospective investors relative to its regional peers, including one of the most competitive cost structures in the Caribbean, largely due to low energy and utility costs. The availability of developed support services in telecoms and IT, a generally well-educated labour force, as well as the island’s location south of the hurricane belt are some of the additional benefits -to offer sector investors.