The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has unlocked just one-third of the boating/yachting industry’s economic benefits, marina operators argued yesterday, with last week’s exhibition exposing “gaps that Bahamians need to fill.”

Marques Williams, the Association of Bahamas Marinas (ABM) president, told Tribune Business that the first-ever Bahamas Charter Yacht Show “highlighted there is some work to be done” while also helping to forge potential partnerships between foreign and local firms and showcase what this nation has to offer as a boating and yachting destination.

“There are some gaps, spaces in the industry for Bahamians where we now need to look at filling those gaps,” he explained. “Things like getting into services to yachts, the ancillary services they require - brokerage, charter brokerage, agents, managing yachts. At this point in time, Bahamians are not major players in those areas and we feel those are areas where we need to do more work.”

The potential for establishing a full-fledged yacht registry under the Bahamas Maritime Authority’s (BMA) supervision was also identified at the show. “There are more areas where the Bahamas Maritime Authority (BMA) can shine, get into yacht registration, and be a major player in the industry,” Mr Williams added. “Those are areas of importance that we saw, and are going to work to highlight them to the Bahamas government. It has highlighted there is some work to be done.”

Peter Maury, a past ABM president, told Tribune Business that The Bahamas is “not even close” to realising the full economic potential from its yachting and marina industry. While the sector had been “well on our way” to achieving this as recently as 2021 and early 2022, he argued that the nation “seemed to go backwards” by making it more costly and difficult for foreign charters to conduct business in The Bahamas.

He was, of course, referring to the imposition of 10 percent VAT on yacht charter fees in last May’s Budget which, in addition to the 4 percent fee already levied by the Port Department, has more than tripled the sector’s taxation burden to 14 percent.

The Bay Street Marina operator also reiterated that the Government-enforced closure of the SeaZ Pass app, which operated as “a one-stop shop” to allow incoming vessels and their owners/captains to register online, clear Customs and pay for/obtain cruising permits and charter fees, has merely increased the paperwork and bureaucracy facing the sector - thus functioning as a deterrent to coming to The Bahamas.

While the increased taxation has been welcomed by some, who view it as levelling the competitive playing field for Bahamian tour and excursion providers versus their foreign rivals, while also getting the latter to pay for use of this nation’s oceans and natural resources, Mr Maury said: “Everybody has the same complaint. Why is The Bahamas more expensive than anywhere else in the Caribbean?

“The charter fee; they don’t see it as VAT registration. We’re 14 percent total flat out. The rest of the Caribbean is zero. We’re 14 percent. That’s why we see a lot of boats in the Caribbean, why we see a lot of boats not booking charters for The Bahamas this year.

“The brokers attending the show asked about it, and how to make it easier, and why we were doing this to make it more difficult. When are we going to take it online? Is it the captain, the broker, the owner or the customer that does the VAT filing and pays the fee? Nobody wants to do it. A lot of charters got moved to the Caribbean. We did exactly the opposite of previously, and the year before, during COVID when The Bahamas was so easy to get to.”

Mr Maury, who previously disclosed that demand for Bahamas yacht charters had fallen by 30 percent compared to the rest of the Caribbean following the recent taxation change, added: “We turned around and decided to charge you even more and make it more difficult,” he said. “Everybody said we’ll go somewhere else until you figure it out. Some people think The Bahamas is the only place to go, but it’s not.”

Due to the fall-out from increased taxation and the SeaZ Pass closure, he argued that The Bahamas was now further away from maximising the sector’s economic benefits. “In my opinion, we’re not even close. For anybody that would have taken the time to notice, I think they would have seen there is a lot of potential to expand the industry,” Mr Maury said.

“When you go to Europe and see what is going on there in Monaco, Italy, France and Greece, what we’re doing on this side of the ocean is like miniscule. Asia is enjoying a 6.8 percent growth rate. They’re building yachts and marinas faster than anybody. It will be an $85bn industry in the next two years.

“You’ve got Cuba trying to get into it, and Bermuda opening up for charter yachts after they did the America’s Cup. They realised how lucrative the market is. You don’t have to spend to get them there. They’ll come provided you don’t run them out with taxes. In Cuba, they’re flying stuff in from Europe on Air France. The whole industry is changing, which is what happens in high-end tourism, and changing very quickly,” he added.

“We’re still - I don’t want to say backwards - but it seems that we went backwards. We’re not too competitive. Last year I would have said we were well on our way, but this year we’re kind of stagnant. We’re one-third of what we should be doing. We have new marinas getting built right now, but I don’t understand how they’re going to fill those slips that are getting built.”

Pointing to Jamaica’s investment in yacht repair facilities, Mr Maury said: “In my opinion our competition is doing things to make it easier to keep the business, and the Government should seriously consider what is going on in the Caribbean around us. Just increasing the taxes, and not doing anything, or not doing anything to make it easier doesn’t seem to work in my opinion and has never worked anywhere.

“When we have boats going through The Bahamas to the Caribbean and not staying here, in my opinion that’s a problem. It was our intention in the Association of Bahamas Marinas to fill more of the marinas around The Bahamas and find new itineraries and experiences, but now boats will go elsewhere where there is better value for their customers.”

Mr Maury said the Port Department needs to also change its approach if Mr Williams’ objective of getting more Bahamians into yacht brokerage and related fields is to be realised. He added that the Government agency, in seeking to protect the sector for Bahamian ownership only, is mandating that brokers, agents and surveyors must own the vessel they will use for charters. However, most cannot afford to buy such boats.

“All it does is keep us out of it,” he argued. “Our laws need to be updated to allow Bahamians to solicit charters of foreign flagged vessels. You’d have far more Bahamians in the industry if you did that, but instead they say it’s to protect it for Bahamians. Most of those brokers, agents and even surveyors don’t have a yacht, but the Port Department says you have got to have your own yacht and own the boat. It’s pretty tough.”

Mr Williams, meanwhile, said the ABM was still in discussions with the Government on the yacht charter VAT. “We are still in communication with the Government on that area,” he said. “We’re still working very closely with the Government to hopefully find a solution that is mutually beneficial to everyone.”