A tax levy that will effect your decision when finding a hotel London offers is currently passing through legislation. The government is placing a levy on new hotel developments and this has the the IHG, InterContinental Hotel Group, concerned. While the thought was in the right place, as the tax levy is designed to help pay for a rail project running from Heathrow Airport to Canary Wharf, hotel chains are concerned that raising prices on hotels will negatively affect tourism.
This project is designed to connect these locations to make it easier for tourists and to attract business so it’s completely reasonable that the industry is concerned after London’s Mayor Boris Johnson goes against the goal of offering support jobs in London’s tourism businesses.
In the upcoming years there are several world events scheduled to occur in London that would be affected by an increased hotel cost but also would see conveniences from the rail project. London will be playing host to the Olympics in 2012 and the Rugby World Cup in 2015 which will bring with them a large tourism boom from many countries. This is essential as the world’s current economic crisis is reaching a peak in countries that have been using the Euro and are feeling the effects of the crash in Greece.
Hotels protesting this tax on future development have brought up the fact that the jobs created by the hotel industry are vital for the economy which, while not in hot water yet, is bracing itself for tough economic times that have struck elsewhere in Europe. More job opportunities without reducing pay is a good way to promote confidence in lean times.
If the Mayor follows through with the plans for this tax, the average bill of construction for the average hotel with 200 bedrooms could increase by 3-4% or better, which amounts to around a £300,000 increase. This would cause a potential hiring or pay roll reduction for close to a three year period.