The European Tour Operators Association (ETOA) has condemned the Cologne City Council over the introduction of a new tax. The so called “culture” tax is slated to be levied upon hotels as of October 1, 2010 at the rate of 5 percent of the gross room rate (i.e., the price paid by the guest).
The decision to implement this tax was taken on September 9. This was three weeks’ notice. While there had been some speculation that a tax might occur, the hotel and tourism industry has been taken by surprise. Some hotels are – at the time of writing – still becoming aware of this sudden levy.
Part of the problem with this sudden tax is that it is wholly unclear who is supposed to pay, what they are supposed to pay, and how they are supposed to pay it. According to the council, it is a 5 percent tax on the price paid by the consumer. It is not clear if this “price” is calculated including VAT, or before. Nor is it obvious how hotels (who will have to levy this tax) will establish what a client was charged when selling a room through a third party. It also promises to be an administrative nightmare, as hotels will have to collect this money from clients, many of whom will have prepaid.
Tom Jenkins, ETOA’s executive director, said: “This is an extraordinary act by Cologne, one which will damage its reputation. It has done valiant work establishing itself as a cultural destination on the Rhine. The council compromises this with a haphazard and arbitrary tax named ‘culture.’”
Hotels and tour operators who are concerned about the situation are encouraged to contact Nick Greenfield, ETOA’s head of tour operator relations, on +44 (0)20 7499 4412 or by email to [email protected] .
Members of the media can contact David Tarsh, Tarsh Consulting, on +44 (0)20 7602 5262 or +44 (0)7770 816 070 or by email to [email protected] .