Current plans to introduce a “Bed Tax” have been roundly criticized by the hotel and tourism industry. The plan is being proposed as part of a national Government tax review of local government funding and would see a 10% tax surcharge being levied per night on top of the already existing 17.5% VAT.
The plan follows on from a report last year for the Association of London Government, which represents 32 boroughs, which described the tax as, "an ideal minor tax in that it relates to a group that imposes clear costs on authorities but which presently contributes nothing directly towards those costs".
The current proposals, as they stand, could raise the cost of a short UK break by up to £100 for the average family. While the UK is already, throughout Europe, second only to Denmark in the severity of its taxation levels for tourism, the newly proposed tax would put Britain firmly above the Danes making it the highest taxed holiday destination in the EU, nearly three times the European average.
The idea which is presently under consideration by Sir Michael Lyons, who is tasked to review the plans for future local government financing, however the Liberal Democrats warned that implementing such a move could be "disastrous" for the entire £12bn UK tourism sector.
Liberal Democrat culture spokesman Don Foster told the BBC, "When you think that VAT on tourist-related activities in this country is 17.5 per cent, whereas in the rest of Europe it is 8.5 per cent and in countries like France 5.5 per cent, these tourists use services, but they are certainly already paying for them."
Industry news publisher Caterer and Hotelkeeper has been joined by the UK hotel big hitter, Travelodge, along with the British Hospitality Association (BHA) and the Tourism Alliance (an umbrella group of 45 trade associations), to formally lobby against the plans. Another hotel industry heavyweight, Hilton, spokeswoman said the company strongly supported the BHA's efforts.
While Travelodge has set up its own online petition, the deputy chief executive of the BHA, Martin Couchman, said the organisation encouraged its members to lobby independently, a message which online UK hotel directory [http://www.superbreak.com/info/saynotobedtax.htm] Superbreak has taken to heart, with its own petition, in an ongoing campaign to bring prices down.
A recent Travelodge survey of 2,000 UK consumers, revealed that 85% already believe UK hotels are too expensive, a perception that will only be exacerbated by a 10% price hike. Current predictions by the tourist industry indicate the impact of the tax could lead to the possible loss of up to £1.3bn and 32,000 jobs if the tax were to be introduced.
Don Foster commented, "We have got a problem and anything like a bed tax that would put people off from coming to this country would be a real disaster."
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