Calm down! Hotel tax rate hike is only from 8% to 10%

The Governor is proposing to increase the hotel tax 25 percent, the first increase since 1993.

The current rate is 8 percent. It is levied on all villa, condo, and hotel accomodations and generally passed along directly to visitors. The new rate would be 10 percent and extended to also include timeshare rentals.

All funds will be applied to the territory’s Tourism Advertising Revolving Fund which is used by the Department of Tourism to implement marketing and advertising campaigns to attract visitors.

“It is essential that we take the necessary steps to level the playing field for attracting visitors to our islands,” said Commissioner Nicholson-Doty.  “By leaving our room tax rate unchanged over the last 17 years, we have placed ourselves at a competitive disadvantage for marketing the destination while other destinations have adjusted to meet market conditions and have outspent the U.S. Virgin Islands."

By comparison, some nightly room tax rates in other destinations are markedly higher. Puerto Rico's is 24%, the Dominican Republic is 15%, and the Bahamas is 10%.

21 thoughts on “Calm down! Hotel tax rate hike is only from 8% to 10%”

  1. “attracting visitors to our islands” By raising the hotel tax? Interesting concept. Have you considered marketing the fact that your hotel tax is much lower than Puerto Rico’s? Do the hotels and timeshares see this as a step that will bring in more customers?

  2. We come to the Virgin islands BECAUSE of the reasonable taxes. We do NOT go to Puerto Rico!
    Once you get the reputation for OVER taxation it will take a very long time to get people back…we will go elsewhere. You had better prepare for when Cuba becomes US friendly again. That is Really going to be a factor. DON’T get greedy!!

  3. A long time visitor to St. John.
    As it is for many people, the economic squeeze has put a St. John vacation more out of reach.
    Not sure what the wisdom/thinking is behind legislative negotiations here…..but a 25% tax is basically telling a large group of vacationers to go to a different island.
    I would also add, in the competitive rental environment, where supply is outstripping demand, owners will be forced to further cut their rental rates.
    Bad idea. Really bad.

  4. I honestly do not think that will be attracting more people to your island. I may be wrong, but from my perspective I am trying to find the best deal while still finding that tropical getaway. I would tend to think that you will attract more by advertising that you are one of the only islands who have not raised their taxes so that you can pass that savings on to the visitor.

  5. Is anybody else shocked that this topic never came up while he was running for office a few months ago. This is a bad idea. If I wanted to go to Puerto Rico or Dominican Republic are you serious!!! No thanks. It’s time to stand up against this Villa rental owners. Rent the proerty on VRBO and don’t pay them anything over 8% tax. Hotels are on thier own we only rent villas but geeze come on GOV.

  6. Our last trip to our favorite island, St. John, was in 2007 and then the economy tanked. I have not been able to justify the expense of a vacation there since. This proposed tax made my future hope of someday going back completely disappear.

  7. Your headline is very misleaing!! Is the proposed increase 10% or 25%. Or is the increase 25% of 8% to make the new tax 10% ?? I do believe that some people ( Joe ) might see that headline grabber and be really incensed ( like me ) . SOoooooo what is the proposed tax ???

  8. Hairman is correct about Cuba’s future increase in tourism. Once a certain person kicks the bucket you’ll see things change in relations between Cuba and the U.S. even though his brother is already in charge. People are just waiting and the Cuban citizens will be thrilled to have U.S. tourist back in droves. Although, they will of course have high hotel tax.
    When is the Governor wanting this tax hike in the USVI to commence? I hope not until 2012. Many have already booked their stays thru the summer expecting the current 8% tax. If they do approve the increase they need to have it start NO earlier than Jan. 1, 2012.

  9. This tax increase prevents hotels and villa owners from raising their rates, in fact makes them lower rates to get the same business. So they will have to cut their advertising budgets. When you tax something more, people use less of it, and that’s what will happen here. What is needed is not a higher tax, but a much more creative, efficient use of the dollars that are now collected. For example, I haven’t seen a great Facebook or Twitter campaign for the islands, which are very inexpensive.

  10. Well thats the end of my visits to St John – just can’t afford that. I’ve been going there since 1987 and will miss it so. The search now begins for an affordable paradise if there is such a thing anymore.

  11. I’m with you frank. The change would mean only a $60 difference over the course of one week for a $3000 villa. Most $3000 Villas sleep at least 2 couples. That is $30/week or simply $4/day/couple. perhaps we dont need to spend the money on more advertising for tourism, but as a villa owner, if the funds collected go back into our own cause… Or maybe it would be better to Lay off some government workers, yeah, less infrustructure and amenities for the tourists, Less is best, until you want something. Ultimately, each of the naysayers are just as hypocritical as the rest, they want less people here when they come, they want lower prices which will only come with decreased demand. Fortunately, when they buzz off, the other non-complainers will actually get some of that peace. As for Cuba, Sure, it will be cool and cultural and such. But it wont be St John, not now not ever.

  12. Any villa owner who wants to can publish their price and advertise ‘hotel tax included’ and pay it themselves and still be very competitive.

  13. Seems like the governor has caught a dose of Obamanomics. Just tax tax tax until no one can pay. It’s only a small amount but what about next year and the year after? I’d like to see the tourism numbers for the VI for the past ten years during which there has supposedly been a competitive dissadvantage. Once a government can tax it never stops and the places the money goes is not always where it’s supposed to go. Government is inherently evil, the bet you can do is limit it’s reach.

  14. Money is money and it is getting harder to afford coming to St John. We are coming for our 8th trip in May and I’m afraid it might be our last trip until things turn around.
    Raising taxes is not good for the island. Of course hard working people have to, once again, pay for the mistakes of a corrupt goverment.

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