MANUFACTURERS may have to wait until the dust settles on the 2025/26 Budget Debate before gaining clarity on whether the Government will move beyond moral suasion and introduce policy-backed solutions to enforce local procurement, particularly among hotel chains benefiting from duty-free imports.

For years, industry players have raised concerns that the Hotel Incentives Act disproportionately favours foreign suppliers, allowing hotels to import furniture, bedding, and other goods duty-free while local manufacturers struggle with high costs and regulatory constraints. The issue has taken on renewed urgency following the closure of McIntosh Bedding, which operated under the Sealy Posturepedic brand for over 60 years.

The Government, which has long encouraged voluntary compliance from hotels, is now publicly acknowledging that moral suasion may not be sufficient.

Tourism Minister Edmund Bartlett, during his presentation in the Standing Finance Committee on March 5 , admitted that stronger measures may be needed to increase local procurement.

“You would have heard the prime minister speak of the pivot. And one of the pivots for us in tourism is the supply side, and the focus is going to be heavily on helping to build capacity to respond to the demand of tourism,” he said in response to questions from Opposition spokesman on Finance, Planning and the Public Service Julian Robinson.

Bartlett’s comments represent a shift in the Government’s stance and follows on comments made by Prime Minister Andrew Holness, who hinted at a potential review of hotel incentives if voluntary measures fail to increase local procurement. Holness was speaking at the ground-breaking ceremony for the Grand Palladium expansion in Montego Bay, St James, on February 20.

Bartlett has outlined that the ministry is actively exploring options, including the introduction of long-term supply contracts between local manufacturers and hotels.

“We need to look at how to create an environment which would allow for a feeling of sustainability, both for the manufacturer as well as for the hotels. You know that ours is a 24-7 consumption call,” he explained, acknowledging that any procurement requirement must align with the hospitality industry’s need for reliable, high-volume supplies.

One of the main policy considerations under review is the facilitation of structured supply agreements, which could give local producers more certainty in demand and, in turn, make financial institutions more willing to provide capital for expansion.

“That’s one, close to what you’re saying, to look at the whole business of supply contracts and how we can work together with the partners to enable long-term supply contracts,” Bartlett said.

However, despite these deliberations, the government stopped short of committing to a mandatory procurement threshold for local suppliers.

“We are looking at a number of options. I can say no greater than that at this time,” the minister added.

Created in 1971, the Hotel Incentive Act provides a 10-year relief from General Consumption Tax (GCT), income tax, and import duty to new hotels and existing hotels that have carried out expansion activities or renovations. The benefits are applicable to any company that is recognised as owner, tenant, and operator. Further, under the Resort Cottages Incentives Act, new resort cottages are entitled to seven years’ relief from income tax. A resort cottage owner is also entitled to an incentive for the purpose of an extension.

“The Hotel Incentive Act really encourages the foreign investors to buy locally, but there is no legitimisation of it. There is no legislation around it happening, and the moral suasion has simply not worked,” Private Sector Organisation of Jamaica (PSOJ) President Metry Seaga told the Business Observer in a recent interview.

More direct statements on the archaic Act is expected to come forth during Minister of Finance and the Public Service Fayval Williams’ budget presentation which started yesterday, March 11, in the House of Representatives. Prime Minister Dr Andrew Holness will make his presentation on Thursday, March 20 and Minister Williams will close the debate on Tuesday, March 25. Following that, the Minister Bartlett will speak in the sectoral debate.

For now, the tourism ministry remained silent on questions sent by the Jamaica Observer on the steps it is taking to ensure that more local products are procured by hotels. Sources close to the ministry suggest that any move to cut back on hotel incentives would fall under the Ministry of Finance’s remit.

“Very good questions, but in any event, it would be premature for the Ministry of Tourism to speak on any policy change, given that the budget presentation starts next week,” the source said.

Meanwhile, the Ministry of Industry, Investment and Commerce (MIIC), in its response to queries from the Observer, reaffirmed its commitment to protecting local manufacturers through trade enforcement agencies such as the Fair Trading Commission and the Anti-Dumping and Subsidies Commission (ADSC).

It stated that the ADSC has increased monitoring and surveillance of import and market data trends to detect unfair trading practices and encouraged local manufacturers to file complaints if they suspect anti-competitive practices, such as dumping or subsidies that negatively impact their operations.

“Local manufacturers and other producers of goods in Jamaica can file complaints with the ADSC if they have any concerns about unfair trading practices related to imported products, such as dumping or subsidies, that are affecting their operations. They can also file a complaint where there is a surge of imported goods coming into Jamaica that are adversely affecting their operations, even if those imports are being fairly traded,” the ministry said in an e-mailed response.

Despite this, the MIIC has not proposed changes to the Hotel Incentives Act or duty-free allowances, stating instead that Jamaica operates within Caricom trade agreements, which dictate how tariff suspensions and Productive Input Relief incentives are applied. There was also no indication that the Government is reviewing these policies to provide greater support to local manufacturers.

However, key initiatives are underway to ensure complaints from local operators are addressed.

The ministry said that the ADSC is advancing efforts to digitise its complaint-filing process, with plans to offer online pre-filing consultations and trade remedy applications through the Jamaica Business Gateway platform. Additionally, an industry help desk is being developed to assist local manufacturers in preparing trade remedy complaints. A pilot initiative is currently underway, which is expected to provide key insights before full implementation.