The 230-bedroom hotel, the first to drop its prices in support of the British Hospitality Association's (BHA) Cut Tourism VAT campaign, is reducing its room rate to £152.15 until 8 September, to demonstrate how bringing VAT rates for the sector in line with those of its European counterparts could boost trade.
According to research released by Cut Tourism VAT, reducing VAT by 15 per cent to 5 per cent on visitor accommodation and attractions in the UK would drive £4bn of new revenue into the UK and would create 80,000 jobs.
The Cavendish general manager Neil Braude said: "By offering a reduced room rate to simulate less VAT, we are providing our customers with a more affordable stay. In turn, we aim to promote the impact an increase in business and leisure stays will have on the economy, including the creation of new jobs. Ultimately we hope the Government gets behind this campaign.”
Earlier this month a request by Lord Aberdare in the House of Lords to consider bringing VAT rates for the hospitality and tourism sectors into line with those in countries such as France and Germany to make the UK more competitive, was rejected by the Government.
Baroness Northover said the Treasury was 'thus far not persuaded' that reducing VAT would have a positive impact on tourism.
However, BHA chief executive Ufi Ibrahim said the UK was continuing to 'lag behind' its European counterparts and VAT at 20 per cent was undermining UK tourism's ability to compete effectively within the EU hospitality market.
"The Cut Tourism VAT campaign is focused on asking the Government to reduce the rate of VAT charged on tourism to 5 per cent. It will see Government and industry working together to promote British hospitality and tourism as a vibrant industry to work in, power the industry’s potential to drive economic vitality and jobs, and celebrate the 2.7 million Hospitality ambassadors in Britain
“We are delighted that The Cavendish London has signed up to Cut Tourism VAT and is taking the lead with an initiative to cut it’s room rates to simulate 5 per cent VAT.”
The Cut Tourism VAT campaign is led by the BHA, the British Association of Leisure Parks, Piers and Attractions, Merlin Entertainment and Bourne Leisure and supported by almost 500 groups, association, hotels, restaurants and tourist attractions across the UK.