The Caribbean Hotel & Tourism Association (CHTA) is escalating a formal advocacy campaign to address what it frames as an inequitable industry practice that threatens the financial stability of hospitality providers across the Caribbean region. At the core of the dispute is the growing trend of third-party distribution platforms calculating sales commissions on top of statutory value-added tax (VAT) and goods and services tax (GST) levies that hotels collect strictly as pass-through funds for national governments, rather than as part of their own operating revenue.
Under standard regulatory rules across Caribbean jurisdictions, VAT and GST are mandatory sums that accommodation providers are required to collect from guests and remit in full to state tax authorities, with zero portion of these funds counted as operational income for the hotel. When online travel agencies and other distribution partners apply commission percentages to these tax amounts, the added cost creates no incremental revenue for hotel operators, but directly inflates their distribution overhead. This dynamic places a uniquely severe strain on small, independent hospitality properties that operate on razor-thin profit margins, putting their long-term viability at heightened risk, while also creating cascading financial pressure across the broader regional hotel ecosystem.
“This is a fundamental matter of principle and basic fairness for every accommodation provider across our region,” stated Sanovnik Destang, President of CHTA. “Taxes collected on behalf of governments do not belong to hotels, and they never appear on our balance sheets as earned revenue. Charging commissions on these public funds only drives up distribution costs, while the actual earnings that hotels rely on to pay staff, maintain properties, and invest in local communities stay completely unchanged.”
The Caribbean hospitality sector already operates in an extremely challenging global landscape, burdened by chronically high operating costs, above-average tax burdens, and stiff competition from other tropical tourism destinations worldwide. Adding commission charges to pass-through tax bases threatens to push some marginal independent operators out of business entirely, while for the wider industry it risks distorting pricing structures and disrupting the carefully balanced mix of direct and third-party distribution channels that many properties depend on to remain profitable.
To resolve the issue, CHTA has laid out three clear, actionable demands for distribution platform partners: first, to immediately end the practice of calculating commissions on government-mandated VAT and GST funds that hotels remit in full to authorities; second, to extend the same favorable treatment already outlined in the platforms’ public terms of service for other global tourism markets to all Caribbean hospitality operators; and third, to enter into constructive, good-faith negotiations with regional tourism stakeholders to develop a fair, uniform resolution, including full transparency around how commission calculation policies are applied across different geographic markets and types of accommodation properties.
Moving forward, CHTA is conducting a comprehensive cross-jurisdictional review of existing legal and tax frameworks across all Caribbean member states, to identify potential legislative safeguards that national governments could implement to protect local hospitality operators from this unfair cost burden. The association is coordinating closely with national hotel and tourism boards across the region to align a unified, coordinated regional response as the policy review process moves forward.