The ludicrously high garbage collection fees charged to struggling Petra hotels is just another example of the government’s myopic approach to raising revenue.
By Yusuf Mansur
On its website, the Petra Development and Tourism Region Authority describes itself as a “legal, financial, and administrative independent Authority, founded in 2009 and aims to develop the region touristy, economically, socially, culturally, and contribute to local community development.” It published in the Official Gazette on February 1 a set of garbage collection instructions, which were nothing but delineations of new garbage collection fees that basically stink.
The fees for collecting garbage from businesses are considerable. However, none are higher than the fees charged to hotels. Each room in a five-star hotel pays JD50 per month; four stars JD40, three stars JD30, two stars JD20, and one star JD10. If the hotel isn’t star rated, then it pays JD8 per room per month for the authority to collect its garbage.
At the outset notice how the fees were placed. It is seemingly based on one of two assumptions: The higher the rating of the hotel, the more trash it generates; or the more stars it has the more it can afford to pay in fees. Either assumption is wildly foolish.
At 183 rooms, the largest five-star hotel in Petra will pay this year an additional fee of JD109,800, and the second largest with 92 rooms will pay JD55,200. The 2,300 hotel rooms in Petra will pay the authority a cool JD800,000 extra for collecting garbage, with almost half the money coming from six hotels.
The hotel room rate in Petra will rise accordingly or the owners may decide to swallow it. The latter may be true as the trash instructions came at a time when nine hotels in Petra announced they were going out of business. Does this “development” and “tourism” authority know that no new hotel has been opened in Petra since 1998?
Does the authority need money? It collects 29 percent of the JD50 charged to every foreign tourist for visiting Petra. Last year, its budget neared JD14 million, of which JD6.5 million went to pay salaries, JD2.5 million for land purchases, and the remainder to settle old debts.
Who loses? As Petra becomes more and more expensive, less people will opt to visit it. Jordan is already considered an expensive destination for regular tourists, who have to pay $60 for an entry visa and $ 60 for an exit visa. Few if any of the world’s fast-growing low cost carriers view Jordan as a potential destination in large part because of these taxes.
To anyone from the government who may read this piece: Please make life simpler and easier for investors if you want Jordan to flourish. Imposing a new tax or fee doesn’t always mean the same number of people will pay more. More often than it leads to less people paying more, and we all lose out.