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%.