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Aruba is experiencing a Perfect Storm

AHATA: Aruba is experiencing a Perfect Storm

The Aruba Hotel & Tourism Association alerts the local community to the fact that Aruba is experiencing a “perfect storm”; a combination of simultaneous circumstances that are causing a danger to Aruba’s economy and financial future.

The following developments are currently affecting our island negatively:

  • Hotel room inventory in the Caribbean region is reopening and growing, creating more competition while demand for Aruba is declining.
  • Aruba’s hotel room inventory is about to grow.
  • Lack of qualified candidates for available positions, compromising our ability to maintain a high level of service.
  • High dependence on US market for tourism (80%).
  • Presidential election year in US, which historically causes Americans to defer spending.
  • Coronavirus effect on tourism (fear of travel) and the economy, with a decrease in reservations and increase in cancellations.
  • Aruba is perceived as an expensive tourist destination.

Meanwhile, the Aruba government is introducing more taxes and costs on the commercial sector and the community, raising cost of doing business and consequently prices for residents and visitors.

The local government is taking millions out of the A.T.A. marketing funds to cover costs, at a crucial time to invest in marketing and build demand as well as diversify our market base. As per law the operational surplus of the A.T.A. is destined for the government’s general budget each year. At this time, however, the government is taking additional funds out of the budget that is destined for international marketing.

Even more troubling, the government is seeking to change the law and have all room tax funds be assigned to the government budget instead of remaining earmarked for A.T.A. and international marketing. The Aruba Tourism Authority Sui Generis was created as a result of an MOU between the government and AHATA, in which it was agreed that room tax funds are fully reserved for international marketing by the A.T.A. The proposed law change is a violation of this MOU and is not in the best interest of Aruba. The amendment gives sole right to two ministers to decide the amount that is provided to the A.T.A. budget each year, with no parameters or criteria, nor involvement of any tourism marketing experts.

With these harmful developments, the Aruba government is putting our economic pillar, financial position, and the earnings of our employees at risk. All for the sake of filling the country’s fiscal hole which is a result of decades of governmental mismanagement. 

Posted on Mar 11, 2020