Tourism Tax Row Puts Jamaica’s Resort Property Market on Edge

Kingston, Jamaica, 28 June 2026

Jamaica’s tourism industry has opened a direct confrontation with the government over a proposed tax increase that operators say threatens to accelerate the sector’s uneven recovery from Hurricane Melissa, with industry leaders confirming this week that they will meet the Prime Minister on July 2 to formally present their opposition.

A 5% Rise at the Wrong Moment

The government has proposed increasing the General Consumption Tax rate on specified tourism activities from the current concessional 10 percent to the standard rate of 15 percent, effective April 2027. The measure was announced as part of the 2026 to 2027 revenue package and is projected to generate an additional J$11.4 billion annually. The government has framed the increase as a necessary fiscal response to the economic damage caused by Hurricane Melissa, which caused significant destruction across the island’s tourism infrastructure last year.

The president of the Jamaica Hotel and Tourist Association, speaking at the association’s 65th annual general meeting held at Sandals Dunn’s River in Ocho Rios, made clear that the sector does not dispute the need for fiscal discipline but cannot support the proposed measure as currently designed. The central problem, as the association describes it, is that many tourism operators entered into fixed contracts with tour companies, wholesalers, and cruise lines that extend well into 2027 and beyond. These contracts were negotiated before the tax increase was announced. Operators therefore cannot pass the additional cost to visitors through higher prices. They absorb it directly, affecting profitability, employment levels, and the viability of future investment.

A Sector Already Under Strain

The industry’s concerns carry particular weight given the condition of the market. Significant hotel inventory in western Jamaica, particularly around Montego Bay, remains closed following Hurricane Melissa. Some properties are not expected to reopen until 2027, precisely the year the tax takes effect. Industry voices have noted that raising the cost of doing business in a market still operating well below its pre-hurricane capacity is a questionable strategy at a moment when competing destinations in the Dominican Republic and Mexico are actively marketing aggressive pricing advantages.

The association has also highlighted the cascading effect of the tax increase. Tourism in Jamaica is not a single industry but a network of interconnected businesses, from hotels and attractions to transport operators, vendors, and the communities that depend on visitor spending. A levy applied at the hotel level travels through the system, touching employment, procurement, and service chains well beyond the formal accommodation sector.

The Property Dimension

For Jamaica’s property market, the proposed tax has layered implications. The tourism sector directly supports demand for short-term rental properties, investment villas, and resort-adjacent residential development. A sustained reduction in the competitiveness of Jamaica as a visitor destination would dampen the demand that underpins significant portions of the island’s coastal and resort-area property market. Diaspora investors who own Airbnb-style rentals and small tourism properties are already facing a separately announced GCT charge on short-term rental income from April 2027. The combination of both measures arriving simultaneously creates real pressure on a category of property ownership that has functioned, for many Jamaican households and diaspora families, as a primary income stream. The government and the tourism sector will sit down on July 2. The outcome of that conversation matters not just for hotels, but for anyone with a stake in Jamaica’s coastal and resort property landscape.