A tale of an offer you cannot refuse

This week promises to be turbulent. Last Friday tempers flared in Parliament as the head of the opposition started looking for some obscure PWC report, and consequently the debate on the proposed legislation to change the way hotels and other accommodations are licensed was postponed for the 23rd. Today, Parliament is supposed to vote on the Civil Union amendment, eventually leading the way to same sex marriage, and in court this week the MinInfra must defend building on land previously assigned  as a nature reserve, as the environmentalists are taking AZURE condominium to court.

But let’s go back to Friday. The Aruba Hotel & Tourism Association made the MinPres an offer he so-called couldn’t refuse. AHATA basically offered the government an additional income of Awg 35 million florins to get the MinTour off their backs.

The MinTour has been harping for a long time, on the subject of control. Control this, control that, and advocating more government intervention and regulation in private sector affairs.

The private sector has been avoiding the confrontation, and merely shaking its heads at the MinTour’s desire to stick a square peg in a round hole. They dragged their heels, until the situation escalated to a full fledged war between a sitting minister and Aruba’s tourism industry.

I regret that deeply. I remember similar situations of chronic dissension around the Millennium, during the twilight hours of the first Eman government.

Back to 2016. Finally, at the very last minute before the proposed legislation to change the way hotels and other accommodations are licensed went for vote in Parliament, AHATA produced a proposal.

Do this for me, and I will do that for you!

Dear MinPres, the letter said, just get the MinTour off our backs, give tourism back to tourism professionals, stay out of private sector decisions, and we’ll pay. Handsomely. Some of the room tax considered the Aruba Tourism Authority income which currently goes through the Tax Authority to fund the island’s marketing machine, will be held back, for the government spending pleasure, probably on more green fluff, at the MinPres discretion. That’s a lot of greenbacks, thirty-five million florins.

That letter of proposal, written to address the current difficulties faced by the tourism sector must have dropped like a bomb. While I wasn’t there, I can clearly see the MinTour having a fit, a conniption, an attack of rage and/or total hysterics. He was so close to a parliament vote, but then AHATA upset the apple cart with its letter. The commotion that erupted resulted in a postponement. The lady in charge, the President of Parliament, had to postpone the debate and the vote for another day.

The MinTour labeled the letter attempted bribery.  I see it as a cry for help.

The private sector wants a smaller government footprint. I was under the impression that Aruba is a FREE MARKET economy where prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.

A free market contrasts with a regulated market. Look at Venezuela what a disaster it has become with excessive government intervention in supply and demand.

Anyway, back to the offer. I don’t see the MinPres taking the offer. It is ludicrous to think that he would. Perhaps it’s too late; this should have come up earlier in the game. In retrospect, some of my friends warned me against the Sui Generis status of ATA which converted the island’s marketing machine from a government agency to an independent legal entity within the public sphere. It practically handed the checkbooks and the goose that lays the golden egg over to government, creating a situation where the private sector makes the money, and the public sector spends it. Not good.

It took just over five years for the “new and improved” system to fail.

I don’t know for a fact that the AHATA proposal was written by developer Eduardo de Veer, Meta Corporation, as insinuated by the MinTour, but certain components of the proposal do fit his world view: The search for higher spending visitors, higher RevPar numbers, the need to create market conditions for new airlift, and the need to stop investing in futile, so-called related ventures. These points sound like him, and they are all relevant, so someone’d better listen.

While the MinTour has been at war with the hoteliers, the profile of Aruba’s tourist changed. Completely. The segment of “Other Accommodations” grew exponentially. Proof: Look how much BBO and BAZV is collected from the supermarkets. I really suggest to focus on that, and step up collections of the 9.5% government tax and $3 daily environmental fee, from all Airbnb/HomeAway/Flipkey operators. Your time would be better spent on that.

I also suggest spending more time cleaning the beaches, collecting litter off side roads and cactus, and if you have any time left go into the HORECA schools to make sure students are taught what they actually need to know in order to work for the hospitality industry. Play nice with the MinJust to patrol and secure tourist areas. Play nice with the MinInfra to get more street lights around the hotels. I have a long list, I am willing to share!