MONTEGO BAY, St James — Hoteliers are warning that a proposed 51 per cent increase in water and sewerage rates could deepen the financial strain on Jamaica’s tourism industry, with smaller independent properties facing the risk of further hardship.

The National Water Commission (NWC) is seeking a tariff review that could pave the way for higher rates amid worsening revenue collection and rising operating expenses, prompting concern among tourism stakeholders about the potential impact on an industry still struggling to recover from successive shocks.

Richard Wallace, operator of Boardwalk Village Hotel in Negril, said water was already one of the sector’s highest expenses, warning that the proposed increase could prove devastating for hotels, particularly those already burdened by substantial sewerage charges.

“In the resort area of Negril, we pay not just for water, we [also] pay for sewerage,” Wallace explained, noting that sewerage charges effectively double the water bill.

“So if we pay $100 for water, we pay another $100 for sewerage,” he said, describing the arrangement as a major expense for hotels in the resort town.

Wallace also warned that unexpected leaks could leave smaller properties facing crippling bills, citing cases in which hotels had accumulated water charges running into hundreds of thousands of dollars, with one reported case exceeding $1 million.

“So it’s very frightening. It’s very scary in terms of what potentially can happen if that is granted,” he said of the proposed increase.

Meanwhile, Jamaica Inn Managing Director Kyle Mais described the prospect of higher water rates as another blow to an industry that has yet to fully recover from the effects of the COVID-19 pandemic, Hurricane Beryl, and Hurricane Melissa.

Speaking both as a hotelier and a citizen, Mais said the proposed increase was particularly troubling given the pressure households were already experiencing from high inflation.

“For us, as citizens, we’re already facing extremely high inflation, and this is just going to put more pressure on us,” he said.

Mais said smaller, independent and family-owned hotels, which account for a large proportion of the country’s properties, were especially vulnerable because many had borrowed heavily during the pandemic to keep their businesses operating and retain staff.

Their balance sheets, he said, remained heavily burdened by debt even as they tried to rebuild following subsequent disruptions.

“We’re on the road to recovery, but we haven’t recovered. We’re still struggling,” Mais said, adding that the summer had been disappointing for visitor arrivals, with expensive airfares making it more difficult for travellers to afford trips to Jamaica.

He also pointed to the proposed 50 per cent increase in General Consumption Tax (GCT) affecting the industry, warning that the combination of additional tax and higher water rates could push some businesses closer to the brink.

“That could be a nail in the coffin for many of us,” Mais said of the tax proposal, adding that the proposed NWC increase could represent another.

While acknowledging that the 51 per cent water and sewerage rate increase had not been approved, Mais said he was concerned about the implications for businesses, their employees and the wider population.

The Jamaica Hotel and Tourist Association (JHTA), meanwhile, acknowledged the importance of reliable water supply and the NWC’s need to invest in infrastructure and maintain financially sustainable operations, but said more clarity was needed on the proposed adjustment.

JHTA President O’Brian Heron said a 51 per cent increase was significant and raised questions about how the new rates would affect the different categories of customers served by the NWC, particularly hotels and attractions, which rank among its larger commercial users.

“The NWC serves several classes of customers at different rates, and we need to understand how the proposed increase would apply across those classes, including what improvements customers could expect in return, particularly in service reliability, water quality and the reduction of system losses, and how soon those improvements would materialise.

“The JHTA is aware of the presentation made by the NWC to the Public Accounts Committee. We look forward to meaningful consultation with the NWC,” Heron said.