Bill Proposes Tax Rebates For Guam Hotel Development

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Visitor industry has goal of boosting arrivals by 650,000

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Nov. 3, 2014) – Hotels will receive a tax rebate, exemption and abatement -- equal to 10 percent of their total construction cost -- if a newly introduced legislation becomes law.

Sen. Dennis Rodriguez Jr., D-Dededo, introduced the legislation to help Guam's visitor industry meet its goal of increasing tourist arrivals from 1.34 million last fiscal year to 2 million by 2020, and maintaining that minimum threshold thereafter.

To achieve that goal, a tourism consulting firm recently stated at the Invest Guam conference that the island would need to build new hotels with between 1,550 to 2,000 additional hotel rooms.

During peak travel periods, Guam has had to turn down some hotel bookings, but during the lean season, hotels still struggle to fill all of their guest rooms, Pacific Daily News files show.

Hotel investing has been sparse on Guam, with the latest hotel to rise in Tumon Bay, the Dusit Thani Guam Resort, estimated to cost $150 million. Before the Dusit Thani, the last major hotel development in Tumon Bay was the Outrigger Guam Resort, developed 15 years ago. Both are owned by local developer Tanota Partners.

Japan-based Ken Corp. also recently confirmed plans to build a $120 million hotel in Tumon next year.

Sen. Dennis Rodriguez Jr.'s Bill 416 proposes the tax breaks under what the legislation calls a "special qualifying certificate specifically for the development of 1,600 new hotel rooms."

The 10-percent tax rebate, exemption and abatement should apply to the following taxes, the legislation states:

Existing Guam hotels may be eligible for the proposed tax breaks if they invest in new capital that adds more guest rooms, the legislation states.

Existing hotels seeking tax breaks must invest an amount for renovations that should be no less than 20 percent of the hotel's value, the legislation states.

The proposed special hotel qualifying certificate will be under the approval authority of Guam's governor. The Guam Economic Development Authority will submit a recommendation to the governor, the bill states.

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