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Local hotel owners offer views, recommendations on room tax

Tradewinds Hotel has offered two major recommendations to counter the Lolo Administration’s proposed 5% room, or occupancy tax, which affects hotels, motels, and other lodging places in the territory.


Hotel official Olataga Toa offered the recommendations in a written statement, which included the reason for the hotel’s opposition to the proposed tax. The statement was presented to the Senate Budget and Appropriations Committee as the company’s official position on the measure, which Toa says is an unfair tax because it targets only the hotel/motel industry in the territory.


In its recommendation, Tradewinds calls for a comprehensive study of the impact the tax will have on the tourism industry. “Especially when tourism has been highlighted earlier in the administration’s term as one of the prioritized industries to develop,” it says.


Tradewinds says the results of such a study should be presented and opened up for discussion with industry members and with the public. A bill would then be introduced— or not— based on such a discussion.


And if warranted, and a bill is presented and passed, Tradewinds then recommends a longer lead time from the date of the bill being passed, until its effective date, to allow for all computer upgrades, staff training and an updating of all necessary room rates to all hotel and other partners off island to ensure a smooth transition.


Toa told the Senate hearing that additional operating costs will be incurred by the hotels as they will need to upgrade computer software and train their staff. It will also need to revise commission rates to wholesalers and retailers off island.


Sadie’s By the Sea owner Tom Drabble verbally suggested a sales tax, which he said would be a fair tax for every segment of the community, with everyone paying the tax and not just one industry. (See Samoa News editions, Mar. 26 and Mar. 27).


The Senate committee has not yet made a decision on the bill, with only two weeks left in the current session. During the committee hearing, only Sen. Leatualevao Asifoa publicly stated that he supports the bill, saying that visitors have to pay something to help the government. He also said that this bill is long overdue, arguing that when local residents travel off island they have no choice but to pay room taxes in places such as a Samoa and Hawai’i.


Meanwhile the House last Friday passed in third and final reading its identical version of the bill, which went through first reading in the Senate yesterday.


The House only heard from ASG witnesses during a hearing last Wednesday, where several faipule voiced their strong support of the measure.


However, there was also a call for testimony from the American Samoa Visitors Bureau on the impact of the bill on the tourism industry. (see yesterday's edition for details on the House hearing.)