The Barbados model of charging hotels a per night room levy serves as a vital blueprint for other Caribbean governments seeking to reclaim fiscal sovereignty in an era dominated by large-scale all-inclusive resorts. For too long, regional economies have grappled with “transfer pricing” and the bundling of services, where the true cost of a room is obscured within a total package price paid to overseas entities. By shifting to a fixed, per-night room levy, neighboring islands can bypass the opaque accounting practices of multinational corporations. This ensures that the host nation receives a guaranteed fiscal return for every visitor, regardless of how heavily discounted or bundled the package appears on a foreign travel website.
Furthermore, implementing a universal per-night levy would mitigate the “race to the bottom” that currently characterizes regional tax competition. When individual islands compete by offering tax holidays and VAT exemptions to attract major hotel brands, the entire region suffers from diminished public revenue. If Caribbean nations move in concert to adopt the room levy, they establish a regional standard that recognizes the inherent value of the Caribbean brand. This collective approach prevents developers from playing one island against another, ensuring that the heavy environmental and infrastructural costs of tourism are consistently funded across the archipelago.
The conflict inherent in the all-inclusive model—where the “sun, sea, and sand” are public goods but the profits are increasingly privatized—demands a direct taxation mechanism. All-inclusive resorts are designed to keep guest spending within the property walls, often starving local restaurants and taxi drivers of secondary revenue. A per-night levy acts as a necessary “entry fee” that compensates the state for this loss of local economic circulation. It ensures that even if a guest never leaves the resort, their presence still contributes directly to the national treasury, providing the funds needed for coastal preservation, waste management, and public safety that these resorts rely upon to remain attractive.
Ultimately, the transition to occupancy-based taxation is a matter of economic justice for Caribbean citizens. As these nations face the dual threats of high debt-to-GDP ratios and climate change, they can no longer afford to provide “free” infrastructure to the global tourism industry. Other regional governments should follow Mia Mottley’s lead by decoupling tax revenue from complex corporate profit margins and anchoring it to physical occupancy. This move toward transparency and predictability would provide the fiscal space necessary for Caribbean states to reinvest in their own people, turning a volatile industry into a stable pillar of national development.
