Tax breaks for hotel developers on staff accommodation, storage and office space have been approved by the Senate, despite strong criticism from the Opposition.

Independent senators sided with the concessions, over Progressive Labour Party reservations that the incentives went too far.

A second order after the passage of the Hotel Concessions Amendment Act 2016 approved a sweetener for the Hamilton Princess to convert a former bank into staff housing.

Senator Michael Fahy, the Minister of Tourism, insisted that the breaks were vital if the island wanted to attract developers seeking a good return on investment.

Mr Fahy called Bermuda an expensive jurisdiction in which to do business, maintaining that “we give away a heck of a lot less” compared with elsewhere.

Marc Daniels, the Opposition Leader in the Senate, stood against the amendments, pointing out that the Princess group had already been given abundant concessions.

PLP senator Kim Wilkerson also opposed expanding the definition of a hotel to include such facilities as dormitories and offices.

“We support concessions; we want our hotel industry to grow — but there has to be a limit,” Ms Wilkerson said, pointing out that the parent legislation had been brought by the PLP in 2000.

Senators disagreed along party lines, with independents siding with the argument that securing investment required continued breaks. James Jardine called the five-year incentives a “necessary adjunct” to hotel development, while Joan Dillas-Wright, noting burgeoning excitement in Bermuda’s hotel industry, gave her support — although she cautioned that future requests for concessions needed to be monitored.

Mr Fahy maintained that items attached to a hotel should form a part of the hotel, which the Act made clearer.

Workers staying in dormitories would otherwise rent out studio-type residences, he added, arguably driving up rents for Bermudians seeking cheaper housing. Amendments were passed with three PLP senators against. The Senate then approved a tax break for the Hamilton Princess to convert a defunct bank on Bermudiana Road into staff housing. Mr Fahy said the long vacancy of the old Bank of Bermuda premises had been “disastrous” in and of itself. There would be $5 million invested in the building, with $15 million earmarked for redevelopment.

The Hamilton Princess concessions cover turning it into 55 rooms, with the ground floor going for office space.

The land tax break would give up to $200,000 a year, to a maximum of $1 million over the five years of the order.

Goods to an estimated $8 million would be brought in, getting a duty relief of $1.78 million.