Tobago hoteliers can benefit from a 50 percent increase in reimbursements for upgrade to plant through the Tobago Tourism Development Fund, which was relaunched on Wednesday at the Magdalena Grand Beach and Golf Resort in Lowlands.
Jerry Hospedales, Chairman of the Trinidad and Tobago Tourism Business Development Limited (which administers the
Fund), said the new concessions became effective from December 1.
Speaking at the relaunch, Hospedales announced that for the Hotel and Guest room stock upgrade programme, reimbursement of expenditure on the cost of work has doubled from 25 percent to 50 percent with a maximum reimbursement limit from $750,000 to $1.5 million. Under the Small Approved Tourism Properties Programme, reimbursement of expenditure for work done per room has also doubled, increasing increased from 20 percent to 40 percent. And the maximum reimbursement limit for the Small Approved Tourism Properties programme has increased from $75,000 to $150,000.
Speaking at the event, Tourism Minister Shamfa Cudjoe urged Tobagonians to take advantage of the facility.
“These initiatives come at a critical juncture where our private sector and the tourism sector to be more exact, is experiencing severe challenges related to the decreasing arrivals, limited airlift, poor inter-island connection and low investment. I want
to challenge you, the private sector, the stakeholders, to take full advantage of this initiative,” she said.
“This represents the government extending its hand to you and we cannot walk hand in hand unless you extend your hand too. We, as the government, remain steadfast and committed in our efforts towards advancing the tourism sector and towards assisting the THA in its Tobago Development agenda,” she added.
Hospedales, in reviewing the Fund, said that up to October 31, under the then existing arrangements, 19 proposals with a value of $37.6 million were approved, of which $2.4 million (6.3 percent) related to restructuring of loans for tourism related businesses.
He noted that the Fund was initially set up in response to difficulties facing tourism operators, including falling visitor arrivals, following the 2008-2009 global financial crisis, to maintain lending operations by banks to the tourism sector.
“In May 2012, the Government established the Tobago Tourism Development Fund with a capitalisation of $250 million, with an
initial capital of $45 million. In June 2012, the Government established the Trinidad and Tobago Tourism Business Development Limited (TTTBDL) to administer the Tobago Tourism Development Fund and assigned the responsibility for managing the TTTBDL to the Export Import Bank of Trinidad and Tobago (EXIMBANK).
“Effective June 2013, the TTTBDL began to issue letters of undertakings to financial institutions which were providing hotel and hotel-related businesses with restructured facilities or with new loans to upgrade and maintain hotels and hotel-related business with a cap valued at the equivalent of 50 hotel rooms. Under these structural arrangements, the letters represented guarantees to financial institution whose clients had businesses in Tobago. In the case of default by any one of those businesses, the financial institutions would be able to call on the Guarantee which was backed by cash in the Tobago Tourism Development Fund,” he explained.
Hospedales outlined criteria for accessing the Fund, and noted the benefits.
“In order to be eligible, persons must be operating a business in the tourism sector for three years in Trinidad and Tobago. They must be servicing existing debts for at least 12 months over the past three years, employing a workforce of at least five persons and making required annual payments of guarantee fees of one percent on the existing loans and on the declining balances.
“The benefits for users of the fund is an interest subsidy of five percentage points provided by the Government and funded by the Tobago Tourism Development Fund, a longer maturity period of 15 years provided by the financial institutions of which seven years would be covered by the guarantee and eight years unsecured by the commercial banks as well as comfort that usage could be enhanced in the terms and conditions of the lending, thereby creating a cash flow profile to meet the exigencies of the business,” he said.