BUSINESS Higher income tax for the rich won’t hurt tourism, says Protea Hotels

THE PERSONAL income taxation on high- income earners is unlikely to have a big impact on tourism, according to Danny Bryer, director of marketing, sales and revenue management for Protea Hotels by Marriott.

Bryer said Finance Minister Pravin Gordhan in his Budget speech referred to tourism as a sector, which was labour intensive, and highlighted the important role of the industry in providing jobs in an econ- omy riddled by unemployment.

“The reality of job creation through the tourism sector can be seen in many instances: each time a new hotel is opened, for instance, a number of new jobs are available, and they call for both unskilled and skilled workers, so the industry is impacting positively on people at all levels of society. In addition, the positive impact on various supporting industries, such as suppliers of food, transport providers and tour operators, is equally important.”

Bryer said the government recognised the potential for the tourism industry to grow a great deal and had announced in the Budget speech, the allocation of an additional R494 million for the promotion of tourism to the country.

He said inbound travel figures for last year reflected the increasing popularity of the country among international visitors and that this trend is to continue this year.

“We are further encouraged that no additional measures to limit the spending on travel and accommodation by civil servants were announced in the national Budget speech. The corporate travel sector, including state travel, remains a significant driver of tourism growth. “In his Budget speech, Gordhan announced personal income tax increases for the wealthiest in our society: those with taxable incomes above R1.5m per annum.”

Bryer added that although the high-income sector of society was important for the tourism industry, it was unlikely that the sector would see a negative effect since these were people with substantial disposable income. An increase in the tax rate was unlikely to limit their ability to travel.

“We welcome the fact that no other increases in personal tax rates were announced, as well as that no increases in VAT or in corporate tax is to be implemented.

“An increase in levies derived from fuel sales will result in more expensive fuel for motorists and businesses.

“This is likely to impact food prices negatively.

“Protea Hotels by Marriott looks forward to seeing the further promotion of our country as a destination of choice.”

Enver Duminy, chief executive of Cape Town Tourism, said although it was too early to say what effect the increase in tax rates for those earning over R1.5m a year would have on tourism, the number of people affected by this increase was small compared to the number of people who travel.

“As such, Cape Town Tourism does not believe that this change is likely to have a major impact on tourism. Research on consumer spend patterns shows that this is linked to many different factors, be it values or preferences, and not just on disposable income.”

Duminy said Cape Town remained an affordable destination for both the luxury traveller and those looking for a budget experience.

“With a range of different types of accommodation on offer, and restaurants and experiences catering across the financial spectrum, the opportunity for affordable travel continues.”