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Report reveals disastrous cost of bed tax

25 May 2006

The imposition of a bed tax would transform the bumper May bank holiday weekend into a Mayday distress signal for English hoteliers, according to a new report.

Research commissioned by Travelodge found a 10% bed tax on English hotels would wipe £12.5m off takings over the three-night holiday.

Wider investigations suggest that many local and overseas visitors would not tolerate an increase in the cost of their
hotel stay. VisitBritain calculates that for each 1% hike in the cost of tourism, revenues decline by 1.3%.

Travelodge's own research found that extra charges would prompt 79% of hotel customers to rein back their spending not only at local hotels, but at bars, restaurants and shops.

Another 67% would be likely to shorten their stay.

A 5-10% tax on overnight accommodation is being considered as part of the Lyons Inquiry into local government funding. The inquiry's final report is due in December, while Scotland will publish separate recommendations in October.

Bob Cotton, chief executive of the British Hospitality Association, warned that a bed tax would be disastrous for hospitality businesses.

"In England we have some of the finest hotels and tourist attractions, which is why so many visitors choose to come. A bed tax would change all of this," he said.

Kurt Janson, policy director at the Tourism Alliance, described the tax as a short-term strategy that would "bite off the hand that feeds it".

He added: "A bed tax would remove revenue from local communities when what we should be doing is finding ways of improving Britain's international competitiveness and regaining some of the £18b in tourism expenditure that is lost overseas each year."

Tourists to Britain are already the second most highly taxed in the world, while residents now make 66 million trips abroad each year to seek out cheaper destinations.

Potential losses from a 10% bed tax

  • £1.3b off England's £30b annual tourism revenues

  • 32,000 tourism jobs across England

  • The £7.8b spent by local and overseas visitors on accomodation in England each year

  • So far, more than 2,500 readers have registered their support for our Say No To Bed Tax campaign. If you haven't signed up yet, then fill in the petition opposite or log on here. You will also find details on how to write to your local MP to register your opposition.

By Angela Frewin

For more news, comment and letters on the Say No To Bed Tax campaign >>

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