William Vastine
When Mexico’s legislature voted in January to
eliminate all value-added tax on international meetings, it no
doubt expected support from its hospitality community, as well as
from planners who can now save up to 15 percent off their total
meeting bill in the country.
But one important segment of the market, incentive programs,
was excluded from the zero-tax initiative.
According to Eduardo Chaillo, executive director of the Mexico
Convention Bureau, the omission was due to the nebulous line, at
least in the minds of the legislators, between incentive and
leisure trips. Several groups in the country have taken action to
highlight the distinction, and gain tax exemption for incentives
alongside other types of meetings.
On the national level, the Mexico City chapter of the Society
of Incentive & Travel Executives, in collaboration with the
Mexico Tourism Board and the Ministry of Tourism, has proposed such
revisions to the law. At press time, the Mexican government had not
acted on the new proposal.
Some hoteliers in popular incentive destinations such as Los
Cabos and Cancun have voluntarily waived the zero-tax privileges on
all their international meetings business, a sacrificial move made
in protest of the exclusion.
Among them is Ella Messerli, vice president of the Association
of Los Cabos Hotels. “If nobody raises their hand to take
exception,” she said, “[Congress] will just move on to the next
thing; But if we all say that this is discriminatory, that we’re
just trying to generate money in the same industry, then hopefully
this law will change.”
U.S.-based incentive planners also want to see the law
extended. William Vastine, president of Arlington, Tex.-based
incentive firm Galactic Marketing, suggested the one market
excluded from Mexico’s VAT law is potentially its most
valuable.
Besides dollars spent on programs, Vastine pointed out other
ways the country benefits from this segment of the market: “I
suspect [incentive] participants spend at least as much money [as
meeting attendees] in Mexico, if not more,” since they have a lot
of leisure time and their visits are typically longer.