EXPERIENCED hotelier Ken Robins has warned a ‘tourist tax’ in Bournemouth, Poole and Christchurch would “go a long way to destroying the hotel industry”.
The 77-year-old owner of Hotel Celebrity and Grove Hotel – both in Bournemouth – said that the Accommodation BID’s (ABID) proposals to add a £2 fee to hotels will deter people from booking.
He explained the biggest client for larger hotels is agencies such as Booking.com and that people there want things as cheap as possible.
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Consequently, from the price increase, people will just book the smaller hotels, B&Bs or guest houses, he warned.
Ken, who has more than 26 years' experience in the industry, said: “We may get away with this charge in the relatively short key summer period but no hotel can exist on summer revenues.
“We need revenue all year round. In the shoulder and winter months if we add £2 a night to our prices two things will happen.”
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It’s suggested the ABID will take in £2m per year, if successful in the ballot that runs from April 14 to May 10.
Money raised will then be invested in marketing across the world, events, placemaking and partnership activities.
But Ken fears in order to maintain a tourist accommodation income stream, hotels will have “no choice but to picket this cost ourselves”.
He added: “As well as depressing our profits, hotels are valued at an earnings before interest, taxes, depreciation and amortisation [EBITDA] multiplier.
“This multiplier will vary depending on if the hotel is leasehold/length of lease or freehold. This varies from 3.5 to 5 times EBITDA earnings. At a stroke deduct this charge from the bottom line and the value of your hotel drops between £130,000 and £185,000.
“So how do you feel knowing that your hotel will, overnight, lose an average of £160,000 in value?”
Meanwhile, bosses at the Royal Bath Hotel also said they were not sure whether hotel guests in Bournemouth will take to paying extra for their stays.
General manager Glinys Luff said: "I don't know why they want to do this. I understand they want to make Bournemouth a better place, but I don't know whether the ABID is the right way to make it happen.
"It's a good idea in the sense that they're putting themselves out there however I have concerns that we have not consulted the general public who we are here to serve and they won't agree with [price rises]."
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Tracey Wyke, weddings and sales manager, said: "In this day and age and the state of the economy right now, our guests are not going to want to be paying extra.
"There wasn't any voting on who would be on the committee either. And are we going to be bound by law to agree to be in this ABID?"
Those in favour of the 'tourist tax' includes BCP Council - mostly because the authority is stepping away from funding what it calls destination activities.
Deputy council leader Millie Earl said: “We’ve heard across the country there are around 20 areas in the process of creating ABIDs... we need to have the competitive edge.
“If we fall behind, we run the risk of losing out of that market.”
Housing cabinet member Kieron Wilson said it would be “an important step in supporting our tourism”.
A report by Andrew Emery, BCP Council’s strategic development manager for planning and destination, said if successfully voted on, the ABID should start with a five-year term.
Mr Emery said the purpose of the charge is to “support growth” in the visitor economy, which the conurbation benefits from particularly during the summer.
David Bailey, vice chair of the ABID shadow board, added: “The great thing about this concept is it is based on performance, hotels will only contribute commensurate with their occupancy.
“Going forward it will also mean the management and development of our visitor offering will largely be in the hands of the industry.”
Andy Lennox, on the board in his role as chair of the Destination Management Board, said: “The ABID is a unique proposition for our three towns and its swift implementation is one of the most important opportunities for our local business community both now and in the future.
“Its successful delivery will reverberate around the conurbation for many years to come."
Liverpool became the first place to offer an accommodation business improvement district (ABID) to its visitors, shortly followed by Manchester which charges £1 per night.
Here in the BCP area, around 10,000 jobs in the three towns are in the tourism sector, around seven per cent of the workforce.
The highest spending group are people staying overnight in hotels, guesthouses and Airbnbs which attracts around 651,000 visitors over 1,887,000 nights, according to BCP Council.
The council says this contributes an estimated £204.3m to Bournemouth, Christchurch and Poole’s economies.
Mr Emery said the tourist tax would be applied across all visitor accommodation within the conurbation with a rateable value over £40,000, subject to consultation with the businesses who would be balloted to establish the ABID. This is estimated to include around 73 businesses.
Representatives from the hotel sector, the BH Area Hospitality Association (BAHA), the Destination Management Board (DMB), the four existing BIDs and BCP Council are all part of the ABID board.
The results of the ballot, currently being held, is expected to be read out on May 14, according to ballot holder BCP Council.
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