Hoteliers in the capital have hit out at the Mayor of London’s plans to introduce a new hotel development tax to help pay for the Crossrail scheme.

Previously, only new office developments were being charged the levy.

Bob Cotton, CEO of British Hospitality Association (BHA), is “concerned” that the plans for the new tax have been rushed through.

“It’s a critical issue, at a critical stage… it works out at around £1700 per bedroom,” said Cotton.

He also warned that if the hospitality sector continued to be penalised, it could be detrimental to its future.

“Up until two years ago, we used to have a tax incentive to encourage the building of hotels, and now that’s being phased out, and it looks like they’re trying to impose a charge on a new development,” said Cotton.

“The last thing we want is to slow down that development… Tourism employs350,000 people in London, more than the whold of financial services. We want to keep that growing.”

Hotel bosses from a number of branded hotels, including Alan Parker, CEO of Whitbread, have written a letter to Boris Johnson, the Mayor of London asking him to reconsider.

Parker said Premier Inn is “committed to updating and developing our hotels regularly,” but warned: “Imposing this levy will act as a disincentive for Premier Inn, and other hotel providers, to pursue such improvements and reduce the quality of hotels in the city.”

A spokesperson for the Mayor of London said the developments would have a “minimal impact” on tourism.

But the Mayor has conceded that “for an initial three year period there should be a 20 per cent reduction in the sums sought for developments that receive permission and are started during this time”.

Crossrail will link Heathrow, the West End, the City and Isle of Dogs, with trains to due to start running in 2017.   


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