Caterer and Hotelkeeper is launching a campaign to Say No To Bed Tax.
We want hospitality businesses to join our campaign by calling on Sir Michael Lyons, who is heading up the inquiry into local government funding reform, to ditch a bed tax from his proposals.
We are calling on the whole hospitality industry to voice its disapproval of a bed tax now - before it's too late and businesses are landed with an extra 5-10% in local government taxes. (Sign petition here >>)
The sector already contributes £12b a year to the Government in taxes and London has the second-highest level of taxation of any tourist destination in the world, according to the World Travel and Tourism Council. Accommodation in the UK already faces a 17.5% VAT rate, more than three times that in France.
A local bed tax would push tax on accommodation towards 25%, almost three times the European average, and reinforce Britain's image as a high-cost tourist destination.
The Tourism Alliance thinks that a 5% bed tax would decrease tourism expenditure in the UK by £670m a year.
"The Tourism Alliance fully backs Caterer‘s ‘Say No to Bed Tax' campaign," said chairman Brigid Simmonds. "Unless the industry supports this campaign, it is likely that the Lyons Inquiry's report to Government will recommend that local authorities are given the power to introduce bed taxes. This would be disastrous for both the inbound and domestic tourism industries, deterring visitors from coming to Britain and pushing UK residents to holiday overseas."
The tax has also been criticised by the BHA for unfairly targeting one industry to meet the bill for extra local funding.
The BHA warned that the tax increases would not only deter domestic demand, already under strain from cheap flights to foreign destinations, but would make it even more expensive for overseas visitors.
The imbalance of money brought into the UK by tourism, compared with that going abroad is already £16b. Any tax increase will harm the country's international competitiveness further.
Bob Cotton, chief executive of the BHA, said: "It's interesting that when this country has a record tourism deficit, there is a suggestion to make hotels more expensive, which will only encourage people to go overseas and make it less attractive for people to come to this country."
Grant Hearn, chief executive of budget hotel operator Travelodge, who launched his own campaign against this tax, is delighted Caterer has joined the fight.
Hearn's "Lie down and be counted" campaign has already received more than 42,000 signatures.
"Caterer‘s intervention must now signal an end to the apathy that has gripped our industry on this issue," he said. "I would encourage everyone - from the big chains to the independents - to take up Caterer's challenge and Say No To Bed Tax."
The cost of a bed tax
- Tourism generates £59b in revenue for the UK economy
- London is already rated the second-highest tax destination for tourists, according to the WTTC
- Tourism contributes £12b a year to Government coffers
- 85% of consumers already think UK hotels are too expensive*
- A bed tax would put 64.5% of consumers off holidaying in the UK*
- 77% would reconsider the length of their stay *
- A 1% rise in prices leads to a 1.3% decrease in visitors
- Domestic visitor figures fell by 6% in 2004
- Only 12% of visitors to a UK destination stay overnight
- Overnight visitors contribute £54 per person a day to local businesses
- A bed tax would increase industry's funding to local government by up to 200%
Sources: * Travelodge survey of 2,000 consumers; Nottingham University
By Emily Manson & James Garner