VAT Increases Won't Impact on Scottish Tourism...

Says who?

The recent VAT increases are widely accepted as making Scotland's tourism product less competitive with many of its European Counterparts. This is not an economic lesson here jsut a fact that the cost of eating, drinking and most of all staying in Scotland will be hit as the taxation differntial increases between here and for example Ireland. No, you don't think so?

Well here's an extract from a Dublin five star hotel's email last week with their net rates encouraging business back.

For your information also, The Westin Dublin is pleased to announce that, from July 1 this year, we will be passing on the VAT reduction savings applicable in our sector to our guests and customers. This new and welcome government initiative designed to stimulate growth in the tourism business in Ireland will reduce the former 13.5% VAT element to 9%. The reduction will impact on our room rates and food items, and at The Westin Dublin we are happy to continue to deliver excellent value to our guests and customers by passing this reduction on directly to them.

“Here at The Westin Dublin we are glad to pass on the upcoming VAT reduction to our customers, continuing our philosophy of providing excellent value for money,” says Andrew Henning, General Manager of the Westin Dublin. “We also welcome this general initiative as a boost for our sector at this time, and we look forward to a positive impact from this and other new actions currently being implemented.”

A VAT differential (a direct cost differential) of 11% on all sales. How the hell could that ever have an impact on sales and profitability on Scotland?