Guam Set To Crack Down On Illegal Bed & Breakfasts

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Legislature considers new regulations; ways to enhance enforcement

By Jerick Sablan

HAGÅTÑA, Guam (Pacific Daily News, April 14, 2016) – A local lawmaker who heads the Legislature’s tourism committee has drafted several pieces of legislation to help regulate and enforce laws about Guam’s bed-and-breakfast industry.

The issue of illegal guest houses or unlicensed hotels on island recently became a topic of public discussion after hotelier Bart Jackson, chairman of the Guam Visitors Bureau's marketing committee for South Korean tourists, spoke about the issue at a January meeting of the Governor’s Council of Economic Advisors.

More than 100 unlicensed and unregulated houses, condo units and apartments have been operating as tourist lodging facilities, primarily targeting the South Korean visitor market, Jackson said in January.

Since then, Sen. Tina Muna Barnes, chairwoman of the Legislature’s committee that oversees tourism, and other agencies have been meeting to discuss how the island can regulate these establishments.

A roundtable meeting was held Monday at the Legislature to discuss Barnes’ proposed legislation.

John Camacho, director of the Department of Revenue and Taxation, said at the meeting that his agency continues to enforce local law concerning bed-and-breakfast businesses. His agency has visited some businesses to check if they’re in compliance, he said. They’ve also gotten tips from residents about businesses that might not be compliant.

Because of the focus on the issue, some businesses have come to Rev and Tax to register as bed-and-breakfast establishments, he said.

"I’m glad to hear the continued dialogue," he said.

One of Barnes’ proposed bills would allow Rev and Tax to enter in a tax collection agreement with transient brokers, such as Airbnb and TurnKey, to get the applicable taxes. The sites would collect the applicable Guam taxes like the Hotel Occupancy Tax and remit them to Rev and Tax.

Barnes said the bill was taken from similar measures in other cities such as Chicago and Portland.

Dan Bradley, a Tumon resident interested in getting into the bed and breakfast industry, attended Monday’s meeting and said he was concerned about the bill.

Bradley said he sees a lot of problems for Rev and Tax in trying to introduce a new procedure into their regulations.

Rev and Tax should focus on enforcement of the law, he said.

Vice Speaker Benjamin Cruz said it was important somebody is collecting the taxes on these businesses.

Cruz said he’s used Airbnb before and he expects that the amount he pays includes the applicable taxes. The proposed bill, he said, is a start to ensure Guam is getting the revenue that is coming from these kinds of arrangements.

"We have to start someplace, somehow," he said.

Another bill introduced would place penalties on those who don’t have the proper licenses with fines up to $10,000.

Bradley told senators they should be encouraging more people to get into the bed and breakfast business to allow the development of the island’s tourism.

"I think we should encourage development," he said.

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