UK hotels oppose ‘bed tax’ suggestions

The idea of a ‘bed tax’ for the UK – an additional charge imposed on hotel guests per night – was dismissed in 2007, after a report by one-time Birmingham city councillor Sir Michael Lyons had recommended it was a way for local councils to generate additional funding.

However, the issue has been again brought to the fore this week following a move to introduce such a tax in Venice, coupled with separate suggestions that the hotel sector should carry a bed tax to replace the Air Passenger Duty (APD) imposed on airlines.

Hotels should carry airline tax​

In an interview with Telegraph Travel, Michael O’Leary, chief executive of Ryanair, said APD should be scrapped in favour of a £1 per night tax on hotel rooms. This, he claimed, would encourage tourism by cutting costs for tourists while raising money from domestic holidaymakers and business travellers.

Although such a hotel tax alternative is not on the agenda as government concludes its consultation on the future of aviation tax by 17 June, the UK hospitality sector has re-iterated its opposition to any such levy.

“The hotel industry is already very heavily taxed both through local authority rates and business rates as well as a 20 per cent rate of VAT on consumers – the second highest in Europe for hotel accommodation,” the British Hospitality Association (BHA) told BigHospitality.

“A bed tax would make UK tourism even more uncompetitive. And why should the hotel industry carry the burden of a tax on airlines?”

Bed tax​

BHA said its arguments are the same for the idea of a general bed tax, which has been introduced in other European cities.

For example, a recent federal law in Italy allows communes to introduce ‘targeted taxes’, prompting Florence to propose a bed tax of €1 per person per night. The Commune of Venice this week also announced plans to introduce a similar tax, estimated to generate an additional €20m a year.

Looking to the UK, a similar proposal was raised last month by Destination Bristol, the tourism body for Bristol, under proposed plans for a Tourism Improvement District. This could include a ‘tourist tax’ levied on tourism-related businesses, it said.

A recent poll of consumers by the Mystery Dining Company​ found that two thirds of people were against the idea of a tourist tax on accommodation, which would be used to help fund large-scale city events.

Should such a tax be imposed, 84 per cent of survey participants said they would expect hotel staff to provide more information and guidance on local attractions and events than they currently do.