French hoteliers rile at VAT increase

French hoteliers are being forced to pass to guests the cost of a recent VAT increase. The move, they say, could temper demand, close businesses and cost thousands of jobs. “We have a dogmatic socialist government, which is against luxury and feels that it is OK to penalise hotel clients,” said Francois Delahaye, COO for Dorchester Collection and GM of the palatial Hôtel Plaza Athénée.

From 1 January, VAT on French hotels rose from 7% to 10% — a move that many consider surprising for a country that in 2011 had one of the lowest rates of VAT on hotels at 5.5%.
“The previous (conservative) government reduced the VAT,” Mr Delahaye said. “We asked Jacques Borel and his VAT Club to lobby for us in Paris, Brussels and London. Despite that we lost.
“It is a catastrophe and very bad for employment,” he said.

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