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Hospitality and tourism team up to fight bed tax

04 May 2006

A group of leading hospitality and tourism players have joined forces to spearhead the campaign against bed tax.

Caterer and Hotelkeeper, Travelodge, the British Hospitality Association (BHA) and tourist promotional bodies VisitBritain, Visit London and the Tourism Alliance, have agreed to work together to organise the industry's strategic response to the threat of a bed tax in England.

The group is calling on Sir Michael Lyons, who is heading the inquiry into local government funding reform, to ditch a bed tax from his proposals.

Grant Hearn, chief executive of Travelodge, said: "This is the first time the industry has united to fight against a single cause in this way. We are planning decisive action if bed tax gathers any further momentum. The Lyons Inquiry will feel the full force of this campaign."

The UK's tourist board, VisitBritain, has also now voiced strong opposition to the proposed bed tax.

Speaking at the first meeting of the campaign group in London last week, Bernard Donoghue, head of government and corporate affairs for VisitBritain, said it was time to take action against the tax.

"We have got leading players together to ensure that a bed tax can't get any oxygen," he said.

Donoghue added there were three "very good reasons" to oppose the tax. "It isn't right to pick on one industry to make up the shortfall in local government revenue," he said.

"The second reason is that the UK already struggles to be competitive in the international marketplace because we pay the second-highest rate of VAT on accommodation in Europe. To add another tax will just reduce the attractiveness of the UK as a value destination.

"The third reason is that a bed tax will disproportionately hit the budget end of the market, which has seen the largest growth in the past 10 years."

Donoghue also stressed it would be entrepreneurial operators, who often ran B&Bs, self-catering accommodation, caravan parks or local guesthouses, that would really feel the pinch from a bed tax.

The anti-bed tax group plans to meet again before Sir Michael Lyons's interim report, due in mid-June.

BHA chief executive Bob Cotton said the interim report was unlikely to discuss bed tax specifically, but warned that wider talks could still spell danger.

He advised the meeting was expected to include a discussion of new ways of raising revenue for local authorities, including devolving tax-raising powers. This would throw up a new menace because for many local authorities a bed tax remains an attractive option.

To Say No To Bed Tax now, sign Caterer‘s petition opposite and return it FREEPOST, or sign up online.

Hoteliers get behind Caterer's Say No To bed tax campaign
Andy Cosslett, chief executive, InterContinental Hotels Group"The increase in cost to both domestic and international tourists would lead to a reduction in demand, with the result that overall tourism revenue would fall. This seems directly to contradict the stated aim of the secretary of state, who made it clear in the Tomorrow's Tourism Today report that Government aims to increase the industry's turnover from £76b to £100b by 2010.

"This is also at a time when, as an industry, we should be focusing on the run-up to the 2012 Olympic and Paralympic Games."

David Clarke, chief executive, Best Western"Hospitality is a hugely important industry for this country, and it's not just our industry that will be affected - it's all other businesses related to it. Best Western wholeheartedly supports Caterer‘s Say No To Bed Tax campaign and we have called on all our 251 hotel members in England - representing more than 12,000 beds - to sign up. We have also asked them to lobby their local MPs to register our opposition and make them aware it's whole communities that will suffer from this."

Jeremy Goring, chief executive, Goring hotel, Belgravia, London"I experienced the bed tax in Sydney in 1998 and it caused absolute mayhem. It kick-started a major depression in the industry. I hope Sir Michael Lyons will take note of what happened in other places before implementing this absurd tax. It's one of dumbest ideas I've heard this year. It flouts the most basic economic principles and is a PR disaster in the waiting. If implemented, within five minutes every travel agent in the world will spread the news that UK prices are going up even further."

Patrick Elsmie, operations director, Gleneagles, Scotland

"From a Scottish perspective, anything that impacts those visiting the UK can only add confusion and be detrimental to what is increasingly an important employer throughout the country. While it may not immediately affect Scotland, it is likely it could creep north unless it's killed now. Anything that can be seen as an extra tax to visiting the country will adversely affect all areas, irrespective of whether it's a directly applicable tax."

By James Garner

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