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.