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How Will The Introduction Of A Service Fee Affect Our Tourism Industry?

This week an interesting topic came up for discussion before the Parliamentary Standing Committee on Economic Affairs. The fee would be to supplement the incomes of tourism industry workers. The
02 May 2015 08:33
How Will The Introduction Of A Service Fee Affect Our Tourism Industry?
Peter Hopgood GM Outrigger Fiji Beach Resort and Patricia Mallam Tourism Fiji Public Relations Manager

This week an interesting topic came up for discussion before the Parliamentary Standing Committee on Economic Affairs.

The fee would be to supplement the incomes of tourism industry workers.

The service fee, if introduced, will be an extra levy for visitors where a certain percentage (whatever is decided) would be added to the visitors bill and would then be passed on to employees.

This was for the introduction of a Service Free for all visitors which has been proposed by SODELPA parliamentarian Viliame Gavoka.

Although a number of presentations were to be made before the Standing Committee, majority got postponed due to various reasons.

Therefore we compiled reactions on this issue for our Leaders Talk column this week.

Patricia Mallam
Tourism Fiji Public Relations Manager
Peter Hopgood
GM Outrigger Fiji Beach Resort
Dixon Seeto
Hotelier and President of Fiji Hotel and Tourism Association
John Ross
Tourism marketing and advertising specialist
It is difficult to say outright whether the tax/fee will have a positive or negative impact on tourism without a more in-depth understanding of the impact the implementation will have on all sectors. Tourism Fiji will be making its submission before the Parliamentary Standing Committee on Economic Affairs on Monday. My main concern with the introduction of a 5% service fee is that it will have an impact on visitor numbers to Fiji. Fiji is slowly becoming regarded as an expensive destination, particularly for our core market from Australia. Whilst we all acknowledge that we have outstanding resorts facilities, the most friendliest staff you will find anywhere in the world as well as stunning beauty and engaging cultural activities, tourists simply will not come if it becomes too expensive.
For years now the industry has been stating that we need increased visitation. This should be the focus of the government, Fiji Airways, Tourism Fiji and the tourism industry. Let’s build up the number of visitors coming to Fiji to over one million. This will provide further employment opportunities for our local citizens. We most definitely do not need new taxes to scare away potential visitors.
The additional service charge would add to the added cost of running hotels. At the moment we are operating in very fine margins. So it is something we need to look at very carefully especially such a large industry as tourism. Before we load it with cost, we need to carefully consider the move before we do it.  Once it’s done and it doesn’t work and we have reduction in business and visitor arrivals, it would then be too late and it’s hard to then backtrack and try to correct it. I think it will make it more difficult to sell Fiji because it will increase the price. Fiji is already a relatively expensive destination given there are significant number of taxes, including an increase just recently in the departure tax. I think anything that is added to the cost that is not sensitive to the market, makes the marketing of destination very hard. The purpose of the Service Fee is to increase the pay of the hotel workers and that should be a matter of negotiation between the employer and employee – not a matter of Government intervention.

 



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