The hoteliers have reacted negatively to London’s plans of introducing a ‘bed tax’ for the 2,100 hotels that are based in the capital. It is estimated that this would actually add £3.40 to the cost of a night inside a budget hotel here.
A GLA or Greater London Assembly report asserted that the tourism sector imposes costs on London’s economy in the form of additional demand on public services including the health services, street cleaning, transport network and policing. The report also said that a Berlin-style tax of 5% of the room rate per night can generate about £240 million every year.
This tax would add £3.40 to the price of the average £68 budget hotel room in the capital.
Also, it would add £32 to the cheapest room at the five-star Lanesborough.
Other options like taxing the five-star and also the four-star hotels would not be able to raise much revenue.
The report also said that money would be directed to various cultural attractions offering free entry, London government that promotes the tourism offer or different borough councils that maintain the public realm. However, it adds that the levy might also potentially bring about a reduction in other taxes.
The chief executive of the British Hospitality Association, Ufi Ibrahim said that the proposal was absolutely a mark of ‘folly’.
He feels that the London bed tax would dissuade guests from staying in the hotels overnight. Moreover, it would also reduce the amount they spend in the wider London economy.
