New report reveals the importance of supporting UK hotel sector ahead of Edinburgh Transient Vistor
07 December 2018
Posted by: Pernille Thomsen
UKHospitality, the single voice representing the UK’s hospitality sector, has published data to demonstrate how a ‘tourist tax’ being touted by Edinburgh Council will further disadvantage a UK hotel sector already struggling to keep pace with performance across the rest of Europe.
With a consultation underway on a proposed Tourist Tax in Edinburgh, UKHospitality has already previously warned that the tax could cost Scotland about £175m in lost business – and potentially £45m in Edinburgh alone.
New data released by UKHospitality, reveals that despite a positive monthly change in RevPAR (revenue per available room), UK hotels are suffering the effects of a difficult operating environment compared to their EU counterparts.
Whilst there are some positives for the UK, with a RevPAR increase of +6.9%1, the year to date figures provide concern when drilling down into a key measure of profitability, ADR (average daily rate). The UK reports a +1.1% increase YOY ADR, but with a European average of +2.7%, is lagging behind some of its major competitors1.
These figures come at a time when an ill-advised - and widely opposed - Tourist Tax is being consulted upon by City of Edinburgh Council. Although hotels in the city reported increased turnover against last year despite increased room supply, key operating metrics of room occupancy and RevPar have declined by comparison with 2017.
UKHospitality’s Director in Scotland, William Macleod said: “Scotland’s hotel market is already a major contributor to the economy and any introduction of a Tourist Tax is clearly a move that will add another unnecessary pressure. The latest figures on the performance of the Edinburgh hotel sector, and the UK overall, should be a real cause for concern – particularly the year to date figures. Whilst we experienced a good summer, we cannot compensate the overall performance with a few positive months.
“Couple this performance with the already existing disproportionate VAT system, it is clear that we are not creating an environment of success for our hotel sector. What is evident is that cost pressures, uncertainty and the introduction of more taxation will not translate through into revenue and profit for our hotel industry.”
Notes to editors
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- UKHospitality is the trade body representing the UK’s hospitality sector, established following a merger approved in February 2018 between the Association of Licensed Multiple Retailers (ALMR) and the British Hospitality Association (BHA)
- UKHospitality is the authoritative voice for over 700 companies, 65,000 venues in a sector that employs 2.9 million
- The body speaks on behalf of a wide range of leisure and ‘out-of-home’ businesses, from FTSE 100 enterprises to niche groups and independent single-site operators
- For the first time, the sector has a single voice bringing together businesses from all aspects of hospitality; coffee shops, hotels, serviced apartments, pubs, restaurants, leisure parks, nightclubs, contract caterers, entertainment, stadia and visitor attractions
- Engaging with government, the media and the public, UKHospitality works to develop a robust case on how to unlock the industry’s full potential as the biggest engine for growth in the economy and ensure that the industry’s needs are effectively represented
- The sector creates £130bn in economic activity and generates £38bn of tax for the Exchequer, funding vital services
- Hospitality represents 10% of UK employment, 6% of businesses and 5% of GDP
- Hospitality is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined
- Member benefits include free advice and expert guidance on regulation, finance and health and safety as well as savings on services from carefully selected business partners.
 Data collated from MKG x Hotrec Europe latest report, October 2018. The report presents the results of corporate brand hotels in Europe. The sample consists of a total of more than 6,500 hotels, representing more than 800,000 rooms. The breakdown by segment is as follows: 30% for Budget and Economic hotels, 30% for midscale hotels and 40% for upscale hotels.