'VAT increase on lodging must be off the table'

It has already been stopped several times, but it keeps coming back: the plan to increase VAT on hotel stays. The new cabinet also plans to abolish the low VAT rate on accommodation. Trade association Koninklijke Horeca Nederland (KHN) continues to work tirelessly to get this plan off the table.

The VAT increase on lodging will not only affect hoteliers, says KHN president Marijke Vuik. "Prices for overnight accommodation will start to rise because of this VAT increase. Everyone goes away for a weekend at home sometimes. And you hit all those people with this proposed VAT increase," fears Vuik. "Besides, the countries around us have VAT rates of 6 or 7%. If we in the Netherlands become so much more expensive, there is a good chance that tourists will divert to Belgium or Germany, for example. That is a big blow to tourism in our country. And that also affects other sectors, such as restaurants and cafes, transport, aviation, culture, museums, retail and more."

The planned VAT increase is not the only challenge facing hoteliers, says Erwin van der Graaf, Vice President of Operations managed hotels Western Europe at Accor. "Many hotels are still in the process of paying off their corona debts to banks, the tax authorities and landlords. They have to deal with increasing costs of staff, purchasing and energy, among other things, and sharply increased tourist taxes in certain places. We also see, especially in Amsterdam, a growing opposition to tourism," van der Graaf knows. "This leaves no room for measures that put further pressure on hotel profitability. It is important that politicians realise that there is a high risk of hotels falling over because of these plans."

It is therefore a matter of getting the plans off the table. This succeeded late last year, thanks to a successful lobby of the trade association. KHN advocacy department, together with Vuik, managed to convince enough MPs just in time to vote against Pieter Omtzigt's amendment. The NSC foreman wanted to abolish the reduced VAT rate on accommodation, which would mean a room rate increase of 11%. "In cases like this, it is very nice that we have a relevant network that takes us forward quickly," policy advisor Willem Heijboer reflects. 

He also immediately realised that it was not over with that. "The plan was also in the NSC's election manifesto, so we knew it would most likely be back on the table," he said. And that turned out to be true. The plan can also be found in the new cabinet's outline agreement. Only in this case, it is not just about increasing VAT on accommodation, but also on culture, books and sports. A coalition between the hospitality industry and the culture, sports, books and media sector was quickly formed. With the campaign "No higher VAT. You burden the whole of the Netherlands with it", the occasional alliance brings the problem to the attention of the whole of the Netherlands.

Besides the visible efforts, there is also behind-the-scenes lobbying hard to stop the plan. Several MPs from all parties have already been approached, and talks are being held with politicians. There will also be a meeting where entrepreneurs can share their concerns with politicians. Everything to convince the policymakers who can still do something about it that the planned VAT increases are a bad idea. 

It is a long-term lobby and we are not there yet. In the coming time, attention will continue to be drawn to the adverse effects of the plan, both towards politicians and the public. It won't be easy, because with the intended measure, which is part of the Tax Plan and is to take effect in 2026, the new cabinet expects to bring in 1.2 billion. Incidentally, the plan still needs to be approved by the Upper and Lower Houses of Parliament. In any case, KHN is not giving up. "We will continue until the measure is withdrawn, or the King has put his signature under the law," it said.