Hoteliers in the US Virgin Islands are bracing for the introduction of an increased hotel tax on the island.

The new hotel room tax will rise from 10 percent to 12.5 percent beginning Jan. 1, 2016.

The tax rate will apply to every guest that resides in a hotel, villa, time share, inn or any other sleeping accommodations for a period of less than 90 days.

The tax is 12.5 percent of the gross room rental, including the gross room rate plus any additional charges like energy surcharges and maintenance fees.

US Virgin Islands Governor Kenneth Mapp has said the increased revenue will target horse racing.