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IHG’s recently opened Garner Hotel Preston Samlesbury – Image Credit IHG Hotels & Resorts
Leading UK hotel groups have expressed concerns to the Chancellor over a proposed holiday tax, citing potential negative impacts on hotel investment and development.
A coalition of 12 major hotel executives, including representatives from Accor, IHG Hotels and Resorts, Hilton, Marriott International, Travelodge, and Whitbread, has formally addressed concerns to Chancellor Rachel Reeves MP regarding the potential introduction of a holiday tax in the upcoming Budget on November 26. The group argues that such a tax would adversely affect hotel investment and development in the UK.
The letter to the Chancellor highlights the current challenges faced by the hospitality sector, noting that their tax burden is already significant. The executives pointed out that the rate of new hotel openings has been declining since the pandemic. They argued that an additional holiday tax could further erode the business case for investment in the sector.
The proposed holiday tax, they argue, would add to the already high VAT rates in the UK compared to other tourist destinations, potentially making the UK less competitive as a travel destination. The letter emphasizes that introducing this tax could deter both domestic and international visitors, further impacting the hospitality industry.
The signatories of the letter include senior executives from various hotel groups, such as Aiden McAuley from Accor, Karin Sheppard from IHG Hotels and Resorts, and Steve Cassidy from Hilton. Other notable signatories include Neal Jones from Marriott International and Jo Boydell from Travelodge.
UKHospitality, an industry body, has also opposed the proposed tax, citing previous government statements indicating no plans to introduce such a measure. The organization has highlighted the potential financial impact on domestic tourism, estimating an additional cost of £518 million for UK holidaymakers.
The letter and industry response come amid ongoing discussions about the economic strategies to support the hospitality sector, which has been recovering from the effects of the COVID-19 pandemic. The Chancellor is expected to consider these concerns as part of the broader fiscal policy discussions leading up to the Budget announcement.
