Lawmakers will not rush consideration of the high-end accommodation legislation introduced by President Remengesau but instead will thoroughly review the measure to ensure that concerns brought up about the bill will be addressed.

Remengesau last  week  proposed a law  permitting foreign investments in  accommodations to be limited to  only five-star hotels and resorts. The measure aims at attracting luxury travelers. While, the proposed measure requires future investments to be built with strict guidelines, the government in return would provide tax breaks for the businesses.


The Senate Committee on Tourism and the House Committee on Ways and Means yesterday conducted a joint public hearing on the proposed measure.

Sen. Phillip Reklai, chair of the Senate Committee on Tourism said that another public hearing will be held next week. Although most of the members of Congress supports the measure, the lawmakers wanted to make sure that the bill is done right.

One issue that came up in the hearing is what hotel rating system should Palau follow in determining whether an accommodation fits the “ five-star” category.

Reklai said that hotel star rating system could vary from one country to another and Palau needs to establish its own way to rank hotels from one to five stars or follow a certain classification standard.

He added that there was also an issue raised whether the Foreign Investment Board (FIB) is the right agency to establish star ratings.

Delegate Victoria Kanai also raised the question whether Palau is ready for such development.

Remengesau’s bill calls for amendments in the FIB law, requiring the board to only accept foreign investment applications for lodging with minimum investment of $5 million dollars.

Reklai said although the bill will not shut out budget travelers or affect existing accommodation businesses, the measure has to make clear what constitutes high end destination. [/restrict]