SHORT TERM PROPOSALS
(Three Months)

Real Estate/Construction Sector

Temporarily lower Stamp duty on property transfers to 5% across all categories within the next six months only. This should not be proposed to be extended as the sense of urgency must be kept to the transactions. This will stimulate the real estate industry by increasing sales with short-term closings and transfers.

Maintain current level of Planning Fees, but reduce Building Control fees by 50% and Infrastructure fees by 70% for new projects going into construction by March 1, 2002. Full fees would be paid into an escrow account by developers. Building construction must continue for a minimum of six months under pre-approved schedule for reimbursement. Interest earned should be paid to Government at end of period. Government can extend the period in February 2002, if deemed necessary.

Reduce duties for construction and building materials to a flat 7% for six months. Stagger duty rates for local merchants. If you currently have a Trade & Business license for hardware etc., duties would be dropped to 4% for building materials. Some duty free concessions (mechanical systems, A/C, elevators but not raw materials) for buildings beginning construction before February 28, 2002. Reduce duty free allowance for residents from CI$350 per person to CI$200 per person or per family.

Introduce registration laws for Architects, Surveyors, Engineers and Project Managers that will require local participation in Cayman projects. Double Planning, Building and Infrastructure fees for projects presented to the Planning Department without local company listed on drawing title. This would form the “Import Duty” on drawings and increase the opportunity for local professionals. Government should be mandated to hire local companies with a valid Trade & Business License for its services. Services unavailable locally can be secured through partnerships with local companies.

Encourage investment in the Eastern Districts. Provide more commercial, institutional and hotel zoning on the eastern end of Grand Cayman similar to those initiated for Cayman Brac. Currently, there is practically no such use on the zoning plans. This will allow growth in the sparsely populated and lightly developed areas of the Islands. Reduce the costs of survey and subdivisions in the areas of low land value to increase the value and stimulate development in those areas. These areas currently have existing roads and utility services. This will reduce the continual pressure on western peninsular.

Hospitality Sector

Appoint a new Director of Tourism and Deputy immediately. Locate the ‘preferred’ person from regional tourism departments and private sector companies. Offer a $200,000 signing bonus if the person takes up the position by December 1, 2001. Person must have demonstrated contacts in the field and experience. Offer salary/benefits package at 15% more than they are currently earning. Deputy Director of Tourism can be identified through normal process. Place capable Caymanian to understudy Director for five years of contract.

Hire a new public relations firm to create a new brand for the Cayman Islands tourism product. Short list PR firms based on their existing clients and expertise. Produce a Request for Proposal with aid of private sector and issue.

Reduce alcohol costs to consumers. Initiate a meeting between the Financial Secretary’s office and importers, wholesalers, retailers, and bar operators to confirm the over the counter price to consumers prior to lowering duties. Establish a monitoring process bearing in mind that some properties incur higher operating expenses/etc.

Review the liquor laws to extend the hours of operation of bars/restaurant. The idea is to allow the operators a longer time to recoup their costs (sell more drinks) and the knock on effect will be to reduce the illegal sale of alcohol / ”sessions” after-hours.

Solicit private sector input when preparing the 2002 marketing budget for tourism. Private sector priorities can be identified so that a collaborative approach can be developed over a longer period. This would enable the private sector to offer direct input in advance of spending any money. This would improve efficiency and would lead to cost savings.

Introduce special incentives to tourists who visit the Cayman Islands more than twice per year. For example, a tourist who visits more than 2 times a year can be entered into a raffle for US$10,000 tax-free. More than 3 times the raffle for US$20,000 etc. The minimum stay in a hotel must be three nights per visit. A single five-night stay in Cayman Brac/Little Cayman also qualifies the visitor for $10,000 raffle. This incentive can also be offered for cruise ship passengers. Promote on-line, to existing visitors and by travel agents. Create database from responses.

Allow casinos and gaming industry. This may generate up to $50m per annum in revenue to Government and increase the depth of the tourism product. These casinos would not be open to Caymanians. Set up National lottery and market to cruiseships, locals, and overnight guests. Tax free winnings offshore.

Explore co-marketing options through American Express, VISA etc. and Chambers of Commerce. Use the Chamber’s International Business and Development Council (IBDC) to assist with the promotion of the Cayman Islands overseas. (See Chamber’s Inward Foreign Investment Report, Appendix 3)

Allow hospitality workers to interchange internally between jobs. Allow multi-tasking within a specified range. This will allow more flexibility by employers and possibly reduce number of permits required on island.

Introduce mandatory customer service training for hospitality, Immigration and Customs. If you are in the industry you must take the training. Training should be undertaken during October, November and December 2001, while businesses are slow. To be spearheaded by Government and CITA. Place name badges on all officers who interact with the public and complaint forms in handy location. 3 strikes and you are out of a job. Set up complaint process to be readily accessible.

Try non-traditional methods of attracting tourists through incentive group market and co-marketing. Government to assist private sector in building or securing conference facilities. Secure tax benefits from USA for all conferences/meetings now that we comply with FATF/assisting with terrorist tracking.

Extend the runway to allow direct flights from and to Europe/Canada. This will also help solve the problem that Cayman found itself in Sept. 11-15 where it was ‘marooned’ without significant connection to the world including separation to our food/clothing supply, revenue base and business partners. This is a separate national issue that needs significant thought.

Implement the recommendations of Strategy 13 in the Vision 2008.

Cruise Ship Industry

Provide cruise ship passengers with information to encourage them to return for a longer onshore vacation. Issue a voucher or a coin, offering package at end of 3 or 4 overnight stay/etc.

Direct market to cruise passengers while on Island other tourist attractions and beauty of overnight stay.

Increase cruise ship head tax for the additional ships approved to call from Sept. 11, 2001. Explain that the additional calls present unexpected infra-structural pressure on the country. This extra fee should be specifically earmarked to upgrading the landing facilities and restrooms.

Allow ships to stay over until 7 or 8 p.m. or later in harbour. The cruise lines should be allowed to open their casinos and stores in harbour but no earlier than 4:30 pm. No on-ship visits for locals after 3 p.m. This will allow longer on Island tours (Maybe to North Side and East End) and the possibility of longer shopping in town.

Investigate having Caymanians work on the cruise ship industry as the start of a training programme. Locals could be trained in an exchange programme to get into the hospitality industry.

Place Caymanian greeters at the cruise ship landing to welcome cruise ship passengers. Maybe re-deployed staff from Customs/Immigration after customer service training.

Government/Public Sector

Change direction of public relations strategy that protects Cayman’s financial services sector image and educates the world that the country does not harbour money launderers, terrorists and tax cheats.

Reduce Governor’s, MLA’s and Civil service salaries for 6 months using a staggered system. For example, civil servants earning under $1,500 per month would realize no change. $1,501-2,500 less 5%, $2,501-3,500- less 8%, $3,501-5,000 less 15% and above $5,000 less 20%. 50% of cut payments to be given back January 2003 with no interest.

Re-deploy staff from other departments (Customs, Planning, PWD, etc.) to Tourism Statistic, Economic/etc. Departments. Those critical departments will therefore receive more help now for their new efforts (Database compilation, stuffing envelopes, customer surveys, phonebanks etc), at no new cost to Government.

Restructure Cayman Airways to make profitable without subsidy. Shut down if cannot make profitable in a phased process. Have Cayman run shuttles between ‘profit’ centres (Miami, Kingston). Cut Houston, Cayman Brac etc. Cut staff by 50 persons to begin to bring in line with world airline personnel ratios. Consider daily flights to Cuba. Increase the in-transit route of Miami-Cuba. In short term (2 months) offer 50% rates from Tampa, Houston, Orlando.

Reform Immigration/Customs at the airport by introducing customer service and improved lines. Create an international business line at the Immigration department at the airport that can deal on the spot with temporary work permits. This will increase revenue because most people coming to Island tick the tourist box and avoid the 2-week hassle. Establish a business/tourist line in the customs area for persons who have nothing to declare. This will improve efficiency and provide improved customer service for our guests. Establish a separate area for persons who are asked to be screened similar to other airports.

Continue to explore the pre-clearance of USA authorities here. This will improve Cayman’s marketing image from a security point of view. The USA may also regard this as a security advantage for them.

Remove X-ray machine (subject to specification and cargo department needs) from outgoing cargo area and add to outgoing security checks at airport. This is a good PR issue that costs very little and improves outward security systems pre-flight, cutting down on time and congestion.

Remove outgoing immigration clearance of passengers. Use space for enhanced security measures. Does require some additional training of existing airline employees and possible up to date on-line computer systems.

Suspend pension contributions partially for 6 months. Leave a minimum contribution for both employee and employers of 1% so as not to loose idea that pension is here to stay. Allow employees only to continue to contribute standard payments without employer matching beyond 1%. The current thought is that most pension contributions are now making a negative return based on the administrative costs and stock market chaos. The extra money can be used in the economy over the next few months. This pension money is going overseas for investment anyway so this must have a positive step of leaving more dollars on the Island.

Suspend any new tax measures. Implement costs savings and efficiency ideas only.

Lower electrical costs to consumers. Reduce diesel fuel tax to 25-30 from 50 cents per gallon. This will translate to an immediate lowering in electricity bills since duty is passed on directly to consumers. Additionally, encourage CUC to undertake an extensive public education campaign to promote demand side energy reduction in order to save money on electric bills. Review the electrical rate structure to encourage reduced energy consumption by providing preferential rates for companies and residents that consume less energy. Urge CUC to implement payment schedules for customers who demonstrate need.

Require Government to purchase local equipment and services. All services and goods should be purchased directly through local companies with Trade & Business licenses. A group of persons from Financial Secretary’s office and the Council of Associations should review international purchase proposals for approval of contemplated direct purchase overseas. All professional services shall be done through local professional companies. There is no reason for Government to ask local firms to compete with firms that do not pay local costs/government fees.

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