June 11, 2003 – The Senate Finance Committee got an open love note on Wednesday from the St. Thomas-St. John Hotel and Tourism Association.
The association president, David Yamada, applauded the committee for its rejection last Thursday of a 25 percent increase in the hotel room tax, a $5-a-day surcharge on car rentals and an increase of nearly 19 percent in the gross receipts tax rate. All were proposed by Gov. Charles W. Turnbull as part of the administration's plan to deal with an anticipated deficit of as much as $144 million by the end of this fiscal year.
"It was a great show of leadership to reject these additional taxes knowing that our islands are struggling to address airline seat demand, availability and high-ticket costs, [exacerbated] by the landing fee increases earlier this year," Yamada said in a release.
The Port Authority raised airport landing and passenger fees by 25 percent last Feb. 1. Since then several airlines have announced service cutbacks and American Eagle has discontinued its commuter service between St. Thomas and St. Croix.
Yamada further told the committee: "This type of positive leadership is enhanced when the public and private sectors engage in meaningful dialogue."
Although V.I. hotels enjoyed increased occupancy while the U.S. war against Iraq was going on, Yamada said, "most hoteliers are reporting that booking paces for June, July and August have flattened and, in some cases, fallen behind last year. You also have to keep in mind last year was not a good year."
Yamada said the local hospitality industry and the Tourism Department are trying to attract vacationers via discounts and promotions. Incentives are needed, he said, because "today's cost-conscious travelers have too many alternatives of attractively priced destinations." He added: "This is certainly not the time to increase the cost of a Virgin Islands vacation."
The administration proposals were scheduled to have been taken up by the full Senate on Monday. However, the session was delayed for a closed-door meeting of the governor, his financial team and 12 senators; a second such meeting took place Wednesday, and the Senate session has been postponed to June 17.

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