FIJI HOTELS RETAIN MOST EARNINGS

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Significant local hotel ownership cited

SUVA, Fiji (Fijilive, Aug. 24, 2008) – Fiji’s tourism industry retains around 60 percent to 64 per cent of every tourism dollar, says local hotelier Tony Whitton.

Whitton, who is also the forum chairman of the ANZ Fiji Tourism Convention held in Nadi Friday, said majority of the hotels and resorts in the country were locally-owned.

"That figure is around 60 to 64 per cent retention because not all major hotels are foreign owned. Here, we have a lot of private locally family-run investors, we run a range of hotel products and resorts," Whitton said.

"So, I think we should be looking at more positive things – what is the hotel turnover tax (HTT) revenue because we don't really have a clear figure on that; how much we really contribute to corporate tax; how much we doing to departure tax; and we're an industry that pays our fair share of taxes," he said.

This disputes what was said at the convention by RBF acting governor Sada Reddy, that the industry retains 44 per cent of every tourism dollar.

In his address Reddy said compared to other developing and advanced countries with 50-60 per cent and 80-90 per cent retention rate respectively, Fiji’s retention rate was recorded at 44 per cent.

This means for every tourism dollar, 44 cents remained in the country.

Reddy highlighted the factors contributing to the higher leakage being the industry not fully integrated into the domestic economy, imports of food and other tourism requirement, repatriation of income, interest payments on foreign loans, overseas marketing costs, and other foreign services.

In addition, Forum planning committee chairman Josefa Tuamoto said one of the challenges the industry faced is that Fiji tourism was not recognised as a formal sector of the economy.

"That is the problem, that’s an issue and the interim Government can assist in that regard," Tuamoto said.

"If we are recognised like agriculture, like everybody else, I'm sure we'll have a very positive move forward, and we'll be able to isolate the numbers…okay, this is your investment, this is your return rather than throwing out figures that we don't really ride on," he said.

Whitton said the industry’s proposition to government was the local industry contributed 25 per cent of foreign exchange earnings.

"That is one segment - tourism and they get in 25 per cent. If you run a supermarket and there was one customer that bought 25 per cent of your groceries from your retail outlets every single Saturday, how would you be treating those customers, just one customer? He gives you 25 per cent of your revenue and that's your biggest customer, and the rest gives you 6 per cent, 7 per cent, 8 per cent…but this one person gives you 25 per cent, what attention would you be placing when he walks into your shop," he explained.

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