BOI to grant incentives for tourism firms’ Covid-proofing investments

TOURISM and tourism-related industries that are upgrading and modernizing their facilities under the new normal will now enjoy investment incentives from the government.

The tax incentives to be granted by the Board of Investments (BOI) are income tax holiday for a period of three years and duty-free importation of capital equipment (only value-added tax will be paid) for tourism projects that will renovate to enhance health and safety features and processes. The income tax holiday to be given will be pro-rated according to the amount of upgrade/renovation.

This measure stemmed from the plea of tourism stakeholders to provide them relief as they navigate the new way of doing business amid the pandemic.

Trade Secretary and BOI Chairman Ramon Lopez said, “Tourist accommodation facilities who would like to undertake improvements to make their facilities Covid-proof may consider registration of such with the BOI as modernization projects subject to qualification requirements.”

Tourism enterprises that are eligible to apply for investment incentives include hotels and resorts, meetings, international conventions and events facilities and tourist transport companies nationwide, including those in Boracay.

For tourist transport, these should be locally assembled vehicles with sanitation features. The motor vehicles to be acquired or to be upgraded/modernized will have such sanitation and hygiene features including but not limited to barriers, payment portals, deionizers, seat organizers for sanitation kits, and other features that would promote physical distancing.

Examples of renovations/upgrade that can qualify for such tax incentives include renovation of guestrooms, food and beverage outlets, function/meeting rooms, recreation areas and/or other common areas; investment in new or upgrade of laundry, kitchen, housekeeping, employee facilities and other back of house facilities; building of full, partial or movable partitions; installation of built-in thermal scanners, hygiene gates, and/or booths; upgrade or improvement of ventilation, air conditioning, air filtration systems, water systems, water treatment facilities; a mobile check-in system; non-touch or no contact door lock systems and non-touch control panels in elevators and other areas.

“We recognize that the tourism sector has been one of the worst affected of all the major sectors of the economy due to the current health crisis. By way of providing investment incentives, we hope the sector, which was a major driver of the economy’s growth pre-Covid-19, will stay afloat, continue their business operations and recover the soonest they can,” said Lopez.

“The BOI will continue to work closely with the Department of Tourism (DOT) in the review of our relevant policies to provide the necessary support to our tourism stakeholders and restore industry vigor and growth at the soonest possible time,” he added.

“We welcome this help from the government, especially during this time of crisis. We hope to receive more incentives, or any help from the government in the coming months,” said Carlo Suarez, president of the Hotel, Resort and Restaurant Association of Cebu (HRRAC).

Appeal

Cebu tourism stakeholders, in a previous webinar appealed to the government to grant them incentives, particularly for new investments made due to the Covid-19 pandemic.

“There are a lot of investments today that we are buying for hotels. It would be better if there would be an incentive scheme to be given for all these new investments,” said HRRAC vice president Alfred Reyes.

Since the Covid-19 pandemic erupted early this year in the Philippines, the battered tourism industry, specifically the hotel and resort properties, have poured in hefty investments to enhance their protocol for sanitation and cleanliness, offer new and different services and introduce new technologies to ensure the health, safety and wellness of tourists.

Reyes said HRRAC members have invested in digital technologies to make some services contactless and cashless. Hoteliers also invested in upskilling their staff under the new normal tourism landscape.

Besides granting them incentives, Reyes also appealed to the government to provide them relief in terms of settling their loans. “Maybe we can work on the interest rate. Perhaps more relaxed payment terms,” he said.

Closure

Meanwhile, 62 percent of the hotel and resort members of HRRAC have partially closed as the tourism industry continues to bleed from the impact of the pandemic.

HRRAC has 41 member hotels, 23 resort members and five restaurant members.

“Thirty-eight percent of HRRAC members remain partially open for hotels and resorts. Fifty-four percent of our resort members have partially closed,” said Suarez.

Suarez said there are about 15,000 to 20,000 workers employed under HRRAC’s member companies. “About half of them will have difficulty getting back their jobs this year,” he said.

On June 2, Best Western Plus Lex Cebu, through its Facebook page announced it will temporarily close its doors on June 16, in light of the Covid-19 pandemic.

“We will continue to monitor this rapidly evolving situation until it is safe to welcome our guests back. In the meantime, we will be upgrading our facilities in preparation for our reopening to ensure that the proper safety guidelines are followed when the time comes,” the hotel said.

Under the community quarantine, hotels are allowed to operate but they can only accept those who have existing bookings for foreigners as of May 1 (for areas outside Luzon), guests who already have long-term bookings, repatriated overseas Filipino workers (OFW), stranded foreign nationals, non-OFWs required to undergo a mandatory facility-based quarantine and frontline healthcare workers and other employees from exempted establishments approved by the National Government.

The Mactan-Cebu International Airport, despite its readiness to accept guests, has yet to resume its international operations. However, its domestic routes from Manila and Clark are now operational, creating hope for domestic tourism to slowly restart the tourism economy. (KOC, JOB)