Sandals Resorts International has booted 700 Jamaica Union of Travellers Association operators, who will not have their transfer contracts renewed.
As of December 31, 2005, the hotel chain will withdraw transportation from its all-inclusive package because it must now pay general consumption tax on all airport transfers.
As a result, the contract carriage operators based in Montego Bay, Negril and Ocho Rios, who transfer guests between the Sangster International Airport and Sandals Whitehouse, Negril, Beaches Sandy Bay and Boscobel will be displaced.
JUTA stands to lose 90 per cent of its business. In fact, the transfer packages will now be sold by overseas wholesalers who cannot be charged GCT by the Jamaican Government.
“We are already saddled with a 40 per cent increase in GCT, and cannot absorb the transportation tax as well, so we have to separate the transfers from our packages,” Sandals public relations director Leo Lambert told The Gleaner.
He said the onus is now on the part of JUTA operators to go and negotiate with the Government.
The Gleaner has been reliably informed that the 12 Sandals properties in Jamaica will pay an additional US$4 million (J$248 million) in GCT because of the 2.75 percentage increase which became effective October 1.
JUTA, unquestionably the largest transportation company within the tourist industry and the longest serving, boasting 32 years, will now be at the mercy of the overseas tour operators. “They (wholesalers) will decide who they will want to give the business to, and they have already established themselves with a number of the large local handlers,” said president of JUTA Negril Chapter, Clive Gordon.
He said the domino effect will be devastating to his members, who have invested significantly in improving the standard of their buses in the last two years. “We had to borrow in order to do so and now have loans to pay.”
In the meantime, JUTA has called an emergency meeting of its member for today. “We plan to discuss how we will approach this problem and of course we will be in dialogue with the Government with the view of having them roll back the taxation cost,” said Mr. Gordon.