The increase in the standard rate of VAT from 17.5% to 20% is
due to take effect in only a few weeks time. Are you going to
absorb this cost for the first few weeks over the notoriously quiet
post Christmas season or are you going to pass it onto your guests?
Many are yet to decide.
Key decisions
With effect from 4 January 2011, the standard rate of VAT is
increasing from 17.5% to 20%. Hoteliers need to make two decisions;
a commercial and a practical one. First, who is going to bear this
VAT increase – the hotel or the guest and second, what
actions need to be taken by the hotel to accommodate this increase
in VAT.
Now or later?
Many hotels are leaving the decision on whether to pass on the
VAT increase to hotel guests or to absorb the cost until the last
minute. After the usual hustle and bustle of Christmas the first
few weeks of a new year are notoriously quiet and difficult for
hotels. With hotel bookings low and hotels making offers to try
