Hotels
in The Bahamas have been one of the most important aspects of the nation’s
tourism industry. In the 1920’s and 1930s during the Prohibition in the United
States, guests were accommodated at the major hotels – the New Colonial, the
Fort Montagu, completed in 1926, and the Royal Victoria. Hotel operators
enticed travelers with sporting tournaments and other sightseeing activities at
the historical landmarks of New Providence. Foreign elite were lured by the
exclusive Porcupine Club on Hog Island (now Paradise Island), the posh Bahamian
Club on West Bay Street and others such as the Cat Cay and Bimini Rod and Gun
Clubs. The Bahamian Club, which opened in 1920, was the first gambling facility
in the Bahamas.
In
the 1950s and 1960s, tourists flocked to the new resorts just west of Nassau at
Cable Beach and to Paradise Island in the 1960s and 1970s. With its exclusive
environment, Paradise Island soon drew other major investors like Merv Griffin
and Donald Trump, whose creative genius made the island of paradise one of the
most popular holiday destinations of all time.
Surely,
establishing a hotel in The Bahamas can easily be one of the most important
milestones of your lifetime. Boasting one of the world most attractive beaches,
a stable government, and friendly culture, establishing a Bahamas based resort
is a sound asset that will greatly benefit the pockets of its investors in the
long term. Coupled with a strong commitment by the Bahamas Government to
promote the islands of the archipelago along with incentive driven legislation,
The Bahamas continues to be one of the most popular destinations to establish a
vacation resort.
Defining
a Hotel under Bahamian Law
Under previous Bahamian
legislation a hotel means any building or a group of buildings enjoying common
ancillary services in which accommodation is provided for reward for guests by
a common management, and that the buildings contain no fewer than four bedrooms
for the use of guests as sleeping accommodation, or be equipped with no fewer
than ten beds for such use.
The recent amendments to the
Hotels Act has now altered the definition of a hotel to include the concept of
the “owner occupied rental home and owner occupied property” which is defined
as “property occupied by a person who being the owner in fee simple or as a
mortgager in possession, occupies and resides in such property exclusively as a
dwelling house on a permanent or seasonal basis”. It seems that the minimum
requirements of no fewer than four
bedrooms for the use of guests as sleeping accommodation, or be equipped with
no fewer than ten beds for such use, as required in the previous act, no
longer apply.
Due to the recent concept of
the condo hotel, the Hotels Act defines a condo hotel, as a building used as
both a condominium and a hotel, thus allowing the owner to rent his unit to
other visitors like any other hotel room, when the unit is not in use. Under
Bahamas legislation a condo-hotel is a hotel which satisfies the following
requirements:
- it shall be licensed under this
Act and shall pay hotel license fees;
- it shall pay hotel guest
- it shall pay business license
fees;
- it shall pay real property
taxes, if applicable; and
- individual units shall remain
in the hotel’s general rental pool for a minimum period of nine months per
year.
Licensing
a Bahamian Hotel
Obtaining a Hotel License
The Hotels Act provides the
Hotel licensing Board with the authority to grant hotel licenses to its
applicants wishing to operate a hotel in The Bahamas having regard to the need
in the public interest to maintain an efficient hotel industry in The Bahamas.
Through application made by the hotel operator, the hotel licensing board may
also provide temporary licenses and play a deciding role in the, the transfer
of licenses from one party to another, as well as varying any terms and
conditions in which a hotel license can be held.
Under section 6 of the Hotels
Act the licensing board also has the authority to establish the duration of the
hotel license, which normally takes effect and expires on the 31st
day of December each year (for hotels in New Providence and Grand Bahama), and
in any other case, on the thirty-first day of March, and may also provide an
extension of the hotel license for further periods after the normal expiration
date subject to the payment of the hotel licensing fee.
Fees
Involved in Bahamian Hotel Ownership
Hotel license fees and Hotel
guest tax are two types of fees involved in hotel ownership in The Bahamas.
According to the Hotels Act, hotel license fees are paid to the hotel license
board in respect thereof for the sum of three (3) dollars for each bedroom
provided in the hotel for the use of guests as sleeping accommodation (S15
Hotels Act). This amount is applicable to hotels having:
- fewer than ten bedrooms for use
of guests as sleeping accommodation or equipped with fewer than twenty
(20) beds for such use in New Providence;
- in any Out Island either having
fewer than twenty-five (25) bedrooms, or equipped with fewer than twenty
(20) beds.
Under S16 of the Hotels Act,
hotel guest taxes are paid by each guest of any hotel for the period during
which the guest is provided with sleeping accommodation, at which the sum of
six (6%) percent is charged of the total room rate for the period which the
guest is provided with sleeping accommodation. Under legislation it is the duty
of the hotel operator to collect the guest tax from its guest and make payment
to the Public Treasury and, if permitted by the hotel licensing board, may be
paid in installments or at such periods as may be prescribed (S17, Hotels Act).
Under Section 21 of the
Hotels Act the hotel operator is required to keep and maintain financial
records of the hotel, which may be inspected by the Minister or any person
authorized by him in that behalf. This also includes make copies of any
documents which relate or appear to relate to the financial records of the
hotel. The Minister also holds the authority to request any information
pertaining to the hotel operation as required by the Minister.
Default
of Payment and Penalty for Operating without a Hotel License
The Hotel Licensing Board may
by notice in writing require the operator of the hotel to remedy the default
within such time, not being less than fifteen days, as may be specified in the
notice. The Board may, where there is a license in force in respect of the
hotel, by instrument in writing cancel that license, if an hotel is in default
as alleged by a notice and the operator thereof fails within the time specified
in the notice to remedy the default complained of by the Board.
Section 23 of the Hotels Act
establishes the application of a fine for hotels operating without a license
and the non-payment of hotel guest tax which includes:
- A fine of $500.00 each day of
operation without grant of a hotel license (S23)
- A fine of $600.00 or, (at the
election of the Minister) treble the amount of unpaid hotel tax unpaid.
Supplementary
Licenses
Apart from the grant of a
hotel license a hotel operator may also want to have other tourist based
businesses as part of the hotel operation. Most Bahamian hotels provide at the
minimum, the sale of food and alcoholic beverages, while larger hotel operations
will have more operations (i.e. gambling facilities, beauty/ massage parlors,
city tours, etc.) which are either contracted to local Bahamians or operated by
the hotel establishment. It is important that either the contractor or hotel
establishment has obtained the legal right to conduct any business services by
obtaining the necessary business licenses to do so.
Determining which licensing
authority to apply to will depend on the type of business the applicant will
want to establish. Hotel operations wishing to operate gambling facilities
must apply to the Bahamas Gaming Board in order to obtain a license, while
hotel operations wishing to sell liquor must apply to the Liquor Licensing
Board for an operating license
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