by Terence Baker | March 01, 2004
British lawmakers in January were considering imposing a hotel room tax, the first of its kind in the United Kingdom, to boost local government coffers. In response, the nation’s hospitality industry expressed disapproval, saying any additional taxes on top of the 17.5 percent VAT would make the U.K. less attractive to visitors.
    For the government, a hotel-room tax would confer the same benefits as it does in the United States enabling  cities to raise revenue without taxing their residents. But, warned Ruth Dawson, executive director of the Meetings Industry Association based in Pershore, England, “If the U.K. market is to stage a sustained recovery, it must remain competitive on a global scale, and that means keeping prices under control.”
    “More taxes would only  put us at a further disadvantage in resolving incorrect perceptions of the cost of visiting London, and the U.K. in general,” said René Angoujard, general manager of the 629-room Novotel London West Hotel & Convention Centre.
    According to a spokesperson for the London-based British Hospitality Association, the BHA would not necessarily be against the tax if the money raised was reinvested into tourism, but “the government usually is loathe to raise taxes and then to say categorically into which pot the money is going.”
    The reaction from the United States, where such taxes have been a fact of life for years, was decidedly mixed. “On a practical side, I understand it,” said Kathie Spitzer, CMP, vice president of St. Petersburg, Fla.-based Signature Meetings Group. “But extra taxes do make it more difficult to arrange U.K. visits, especially at a time when shareholders are scrutinizing the bottom line.”
    Spitzer, who organizes a number of meetings and events in the U.K., added that she would have no problem if the tax were somehow incorporated into the VAT total, since it can be reclaimed by foreign visitors and groups.