1 Feb 2024

Updated tourism law for TCI

NEW TOURISM REGULATORY REGIME IN TCI

Owen Foley (partner) and Savannah Sottak (intern), Misick & Stanbrook

Introduction

Tourism and its ancillary activities dominate the Turks and Caicos Islands (TCI) economy, and the luxury tourism sector, in which TCI is a regional leader, and its byproduct construction, have been the main engines of the huge growth in TCI’s economy in recent years.

Rather oddly in a country that is increasingly fond of regulation, the tourism industry in TCI has been largely unregulated until now. A 1978 statute that modestly regulated tourist accommodation was inadequate, overtaken by massive upscale tourism development in recent years, that that 1978 law did not capture.

Earlier this year, the TCI legislature enacted the Tourism Regulation and Licensing Ordinance 2023, (the TRLO), a statute designed to fill this regulatory gap, and it came into effect on November 27, 2023, and this memo is intended to give an overview of its main provisions.

Director of Tourism Regulation

Part I of the TRLO establishes the position of Director of Tourism Regulation (the Director), who is responsible for, amongst other things:

  • the day-to-day administration of the Tourism Regulation Department;
  • registration licensing and classification of premises that provide tourism accommodation, according to prescribed standards;
  • registration and classification of restaurants catering primarily for tourists, according to prescribed standards;
  • registration and regulation of tourism services as prescribed;
  • development of policies, standards and procedures related to regulation of tourism and tourism services.

The Director is given the power to issue licences and compliance certificates, to request information for licensing purposes from operators of premises, and from persons providing tourism services, and to carry out inspections of premises and documents for the purposes of determining whether the prescribed standards are met.

The Director has various powers of entry and inspection, to require and obtain information and to delegate to a Deputy Director and to Tourism Regulatory Officers.

Licensing of premises

Part III of the TRLO deals with the licensing of premises providing accommodation.

The TRLO applies to all premises used or intended to be used for the purpose of providing, for reward or not, board and lodging or lodging only, except for premises (or parts of premises) wholly used for the accommodation of TC islanders, PRC holders or people otherwise lawfully working in TCI.[1] It does not apply to premises let unfurnished for accommodation. Given the proliferation of short-term lettings of private homes and apartments in TCI (AirBnB, VRBO and similar), it specifically covers the letting of vacation rental units by owners (as defined).

It is now illegal for a person to operate any premises for the purpose of providing accommodation for guests except in accordance with the terms of a licence issued under the TRLO. A person intending to operate premises providing such accommodation must first apply for a licence, and breach of that obligation is an offence punishable on conviction by a fine of up to $50,000.

Licence applications are made to the Director and expire on 31st December, with renewal applications each year to be made no later than 2nd December. It is possible to obtain a temporary licence for up to 45 days.

Licences may be transferred, upon application to the Director by the proposed successor. Where a company is the operator of a premises licensed under the TRLO and where a change of control of that company is proposed (for instance, on a sale), the company shall notify the Director in writing of the intended change, failing which the Director may cancel the licence.

Licence to provide tourism services

Part IV of the TRLO introduces a regime for the licensing of tourism service providers. Tourism services are those listed in Schedule 4 (copy attached to this memo). Licence applications are made to the Director, and if granted, last for such period as the Director may determine, not exceeding 3 years.

The Director may revoke or suspend licences in certain circumstances, and licences of this type are not transferable[2]. 

Classification and ratings of premises and tourism services

Part V of the TRLO establishes a classification regime to ensure (i) that all premises providing accommodation maintain the prescribed standards, (ii) to apply established regional and international standards to premises providing accommodation, and (iii) to ensure that there is a recognised price differential among the different types.

The Director shall not license a premises unless he is satisfied that it meets the requirements set out in S.34 of the TRLO and Schedule V. That section allows the classification of premises as one of the following:

  • hotel
  • boutique hotel
  • resort
  • villa
  • condominium hotel
  • condominium
  • guest house
  • bed-and-breakfast
  • self-catering apartment rental.

Schedule 5 of the TRLO goes into greater (and somewhat unclear) detail on those classifications.

In addition to classification of the types of accommodation, the Director and a new statutory committee, the Quality Assurance Consultative Committee (QACC) are required to develop a system for the rating of premises and for the rating of tourism services.

Where a person is aggrieved by or dissatisfied with a decision removing a classification rating or refusing to reinstate a classification and rating, he should submit his complaint in writing to the Director within 15 days. There is to be a complaint resolution process and ultimately the complaint should be submitted to QACC if not resolved. This complaints procedure relates only to removal of the classification or rating or to refusing to reinstate a classification rating that has been removed: it does not seem to allow for complaints as to the initial classification or rating.  Those are dealt with later in the TRLO (see Enforcement below, where there is a broad right of appeal to the Magistrate’s Court against decisions of the Director, and that would be our recommended avenue for appeals).

The Director is required to establish maintain a register of premises, as classified.

Quality assurance, training and compliance

Part VI of the TRLO establishes a regime for enforcement of standards.

An operator (of accommodation premises) shall ensure that his premises complies with the standards to be prescribed and it is a criminal offence to fail to do so. Similarly, an operator of such premises shall comply with the conditions of his licence and with the rating requirements and again, it is a criminal offence to fail to do so.[3]

The Director has powers of inspection in relation to compliance with standards and if he determines that an operator of premises has violated any conditions of a licence or is not complying with any of the prescribed standards or is otherwise in breach of the provisions of the TRLO, he is required to issue a notice in writing identifying the violation. If the operator fails to remedy the violation, the Director may suspend the licence, revoke it, or take some other appropriate measures.

Operators of premises licensed under the TRLO, operators of tourism services and operators of restaurants providing service to tourists are required to have their staff trained under the TIDES (Together Individuals Delivering Excellent Service) program[4].

QACC

Part VII of the TRLO establishes the QACC, whose members, appointed by the Minister, are to comprise:

  • the Permanent Secretary, Tourism;
  • the Director of Planning;
  • the Director of Environmental Health;
  • the Director of DECR:
  • the Chief Quality Assurance Officer of the Tourism Destination Marketing and Management Organisation;
  • Two representatives from the private tourism industry

QACC’s functions include:

  • Receipt and review of applications for licences for premises[5];
  • Making recommendations on the issuance or non-issuance of licences based on a report from the Director;
  • Review of, and making recommendations on, the classification system for premises; and
  • Review of and making recommendations on the rating system for premises and tourism services.

Enforcement and general

Part VIII of the TRLO sets of various enforcement procedures.

If the Director determines that a person granted a licence to provide tourism services has violated any of the conditions of the licence or is not in compliance with the required standards developed under the TRLO, he shall issue a notice in writing identifying the violation and stipulating a time within which the violation shall be remedied. The recipient is required to stop offering the service concerned and to surrender his licence within 48 hours. Upon the remedying of the violation, the Director shall reinstate the licence.

In addition to available rights specified elsewhere in the TRLO, where any person is aggrieved by the decision of the Director in relation to the grant, renewal, reinstatement, or transfer of a licence or in relation to the imposition of conditions on a licence or in relation to suspension or revocation of a licence or otherwise made by the Director in the exercise of any other powers under the TRLO, that person may appeal to the Magistrate’s Court against the decision within 15 days of notification of the decision.

Any decision whether directly to cancel any licence or to impose or vary any terms or conditions on it takes effect upon the expiration of 15 days or such longer period as the Director may specify in writing to the person concerned and if within that 15-day period, a notice of appeal to the Magistrate’s Court is filed, the decision of the Director shall not take effect until the final determination of the appeal.

Various offences are prescribed for

  • Operating premises in contravention of the terms of a licence;
  • Offering a tourism service without a licence;
  • Failing to comply with a notice from the Director under sections 48 (notice for non-compliance) or 68 (notice to comply), in relation to accommodation premises.

As with all statutes of this nature, the granular detail will be in regulations which the Minister will introduce (forms, standards, documentary requirements etc.).

Transitional provisions

The 1978 law, the Tourist Accommodation (Licensing) Ordinance is repealed.  Licences granted under that law which were in existence on 27 November 2023 continue in force for the period specified in them.

A person who immediately before 27 November 2023 was operating a premises or providing a tourism service may continue to operate the premises or provide the tourism service without a licence under the TRLO until May 27, 2024 but must by then apply for a licence under the TRLO.

Other licences

This licensing regime is not a replacement for licences otherwise required.  The requirement to hold business licence, liquor licences and the like remain in force and those licences must continue to be held and renewed.

NOTHING IN THIS MEMO SHOULD BE CONSTRUED AS LEGAL ADVICE.  BEFORE RELYING ON ANY INFORMATION IN THIS MEMO, YOU OUGHT FIRST TAKE COMPREHENSIVE LEGAL ADVICE ON YOUR PARTICULAR CIRCUMSTANCES FROM YOUR MISICK & STANBROOK PROFESSIONAL.

MISICK & STANBROOK

January 2024

TOURISM SERVICES TO BE LICENSED

(TRLO, schedule 4)

(a) Bicycle service;

(b) Car rentals;

(c) Catering services;

(d) Private chef services;

(e) Restaurant and bars;

(f) Concierge services;

(g) Helicopter tour services;

(h) Horseback riding services;

(i) Taxi services;

(j) Travel agencies;

(k) Tour operators land base;

(l) Tour Boat operators less than 30 feet;

(m) Tour Boat operators over 30 feet;

(n) Water sport equipment sales and rental;

(o) Water sport;

(p) Golf;

(q) Spa;

(r) Casino;

(s) Marina.

[1] The (perhaps unintended) logical consequence of this is that letting to a person who holds a TCI residency card less than a PRC will give rise to a licensing requirement under the TRLO. 

[2] There are no change-of-control provisions in the TRLO for companies that hold a tourism services licence.

[3] The criminalisation of failure to meet prescribed accommodation standards seems extraordinary and it must be assumed that enforcement through the criminal courts will be a last resort.

[4] Peculiarly, a program that is referred to in the TRLO but not actually defined in it.

[5] Here the TRLO seems to contradict itself as earlier it states that such applications are to go to the Director

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