The Fiji Government has announced that a new 5% tourism service tax will be applied to all visitors from 01 Sep, for hotels, tours and cruises.
It is said to be for an initial 12-month period, it only applies to those hotel, tour and cruise companies with an annual turnover of FJD2 million, and the proceeds will be ring-fences to help boost the Fiji Airways coffers.
But just how it will be collected, particularly for travellers that have already booked and paid for their trip, has become a hot topic of discussion over the past few days. Travel Today understands that the travel agent bodies on both sides of the Tasman have been working together and consulting with Fiji tourism industry stakeholders and government agencies to get a clearer picture for their members.
. . . Not Absorbing?
While the Fiji Government reportedly says Fiji’s tourism industry has agreed to absorb the tax, that is not the case across the board say some Kiwi travel agents with clients who have booked and paid for travel after 01 Sep, and have contacted Travel Today.
In addition, the Fiji Hotel and Tourism Association has told FBC News that it disputes the Fiji Government’s assertion that the tourism industry will absorb the cost. Its ceo Fantasha Lockington is quoted as saying that ‘feedback from members indicates the majority of, if not all, operators will pass the 5% tax on to customers because absorbing it is not commercially sustainable’
The new tax is being managed by Fiji’s Revenue and Customs and is expected to raise around FJD70 million for FJ.
. . . Dampen Demand?
While there has been some comment that the ‘surprise tax’, on top of Fiji’s already premium pricing, may dampen Kiwi demand for the South Pacific nation, others aren’t so sure.
“I mean, yes, there is a risk that this time Fiji may actually price itself out of the [Kiwi] market,” says one South Pacific specialist. “But I’ve been saying that’s a risk for a few years now, but Kiwis, they just keep booking Fiji.”
