Duty-free shopping 'would boost tourism'

WEDNESDAY, JUNE 20: Duty-free shopping should be introduced for tourists to boost the attractiveness of the island, a leading retailer said yesterday.

George Grundmuller, president and CEO of the Phoenix chain of stores, welcomed the National Tourism Plan’s commitment to making shopping an integral part of the tourism product, as well as other proposals to boost tourist numbers and the visitor experience.

But he said: “Some of the issues retailers are facing need to be addressed and one of the things Bermuda needs to look at is duty-free shopping.

“People don’t want to buy things here that are cheaper at home and you don’t have to come to Bermuda to buy Wedgewood china or a Scottish wool sweater any more.”

Mr Grundmuller was speaking after Business Development and Tourism Minister Wayne Furbert unveiled the National Tourism Plan — aimed at improving the tourism product over the next ten years.

Mr Grundmuller said: “In the past, all exit surveys showed that shopping was the number two activity after beaches and watersports.

“The retail experience needs to be a part of the national tourism plan, from a number of perspectives. It’s something tourists want to do, it employs people and it provides a better all-round experience for visitors.

“There are islands in the south, like St Martin and St John’s that do a good trade in duty-free shopping — staggering amounts.

“We would have to lower or remove the duty on items sold to tourists — that’s lots of the clothing products and small electrical goods like cameras.

“That would generate trade and it’s one of the things that need to be looked at.”

Mr Grundmuller said Bermuda shop owners already had to pay shipping and tax to Government up front – meaning they did not recoup the tax slice until the goods had been sold.

But he added that retailers could also help themselves by extending opening hours into the evening and opening on Sundays.

Mr Grundmuller added there should be a bigger retail presence on the tourism board to ensure the sector’s views were given due weight.

He said: “In broad terms, the plan is good. But the key is to execute it and make sure that what we say is going to happen, does happen.

“I would like to see retail play a bigger role – retail employs a lot of people and when sales go up, we employ more people.”

Chamber of Commerce president Ronnie Viera said he could not comment on calls for duty-free status on tourist sales until he had discussed it with chamber colleagues.

But he added: “We are certainly in favour of the plan — we have had input into it — and we need as much support for retail and other sectors as we can get at the moment.”

Mr Viera said: “The plan does require a change in the way we think in regard to gaming and the way the Hamilton waterfront is built on.

“The chamber has commented before on the burden of paying duty to Government up front for goods. People have goods sitting on the shelves and they don’t get recompense until the goods are sold.

“We’ve spoken to the Ministry of Finance to see if there is anything they could do, but we haven’t had any movement on that.”

Government, however, has allowed retailers to defer 75 per cent of duty for 90 days in a bid to assist the struggling sector.

Phil Barnett, who runs the Island Restaurant Group welcomed the “bold” tourism plan — and said he was particularly pleased by a commitment to reduce the seasonal nature in the Bermuda tourism trade.

He added: “The ability to have consistent business throughout the year will allow us to offer a better product. I also really like the focus on developing a sporting product. The Rugby Classic is a good example of a major off-season event.”

The Ministry of Finance did not respond to our request for comment yesterday.