Beaches Resorts, (family of the Sandals Resorts) has been in the Turks and Caicos Islands now since 1995. According to various online reports, 60% of the airlift that comes to TCI are for guests of Beaches. In addition, Beaches is not only the largest resort but also the largest employer in the private sector. Therefore Beaches play an integral part of the Turks and Caicos economy. This can be a blessing and a threat at the same time. A blessing in that they promote the country, more tourists are coming, more jobs are coming, more revenue for our country. It is threat in that because we are dependent on them, they can use that to their advantage and put the country and the Government in a very compromising and weak position. Recently this has been displayed. Beaches Resort was scheduled to open on October 14th but has delayed the opening to November 2020 and has cited the ongoing tax issue has a reason for the delay. Beaches also recently announced the Resort will closed in 2021 until further noticed. This is a serious threat to our economy.
While I appreciate all of the contribution that this Resort has made to our country, I do not appreciate the threats they continued to impose on our country. While there may be issues with our Government, there are always two sides and sometimes three sides to a story. The one side I want to know is what would have been the occupancy level if the resort had opened on October 14th 2020. Could it be that the occupancy levels were too low to open the resort? Are the dispute over taxes the real issue?
In one news article, the following statement was made by Butch Steward “this is the most ineffective Government we have ever had to deal with when compared to the other jurisdictions in which we operate.” Personally, I believe he is not just talking about the current government but successive governments as well. Quite frankly, the statement is true. This Government and successive Governments have indeed been ineffective in dealing with Beaches. Beaches threatened to close for a lengthy period but our previous Government knew the impact this would have and agreed to contribute $500,000 annually towards the marketing program provided they do not keep the resort closed. This Government wrote off the penalties for Beaches because Beaches was planning to close the resort and should close the resort, it would have a significant impact on the lives of many.
Despite the fact that the Government wrote off the penalties, Beaches continued with a legal pursuit against TCIG stating that they do not have to pay the $26.7 million in taxes that the Government say they owed. So yes we have been ineffective.
We need a thorough review and understanding of the Development Agreement with Beaches and the calculation of taxes for all-inclusive resorts.
We need to do audits early rather than later.
We need to have a great relationship with our developers but never put ourselves in a compromising position. Don’t accept any free rooms or passes from them. Don’t accept any donations from them.
We need to be pro-active and use Invest TCI to seek other developers.
We need to promote and encourage more local investors.
We need to stop talking the talk and truly put incentives in place to diversify our economy
As I mentioned before, I appreciate the contribution that Beaches Resorts provide to the Turks and Caicos Islands Government but no developer or anyone should hold the country hostage. A partnership is not a one way relationship. In addition if taxes were charged to guest and collected from the guests, the taxes should be paid to Government. If on the other hand, the taxes were not charged to the guests due to a misunderstanding or interpretation of the law, then this is totally different matter.