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According to Guillermo Rocha, IHA President, "As travel and tourism markets become increasingly globalised, the range of taxes, fee and tariffs levied on the hotel industry proliferate. More often than not, hotel guests are unaware that a significant part of the rate they pay for a room has already been earmarked for the tax authorities. On the basis of this study, the IHA will lobby to boost understanding by government authorities of the negative impact of taxation policy, and urge action to stimulate industry growth, investment and potential for job creation."

The survey highlights the vast disparity in levels of taxation, from Kuwait where only foreign companies are taxed, to Denmark with its VAT level of 25 per cent, and Hungary, where a total of 59 taxes (accounting for 39 per cent of the room rate) are levied on hotels.

The study also reveals a variance in the level of recognition accorded by governments to the hospitality industry. The industry's positive contribution to the trade balance is acknowledged in Israel and Estonia, where growth in hospitality services is encouraged by exempting all foreign visitors paying in a foreign currency from VAT. Norway also has a VAT exemption for accommodation.

Responses suggest that governments are moving away from income tax as a revenue source, towards consumption and other indirect taxes. According to the survey, VAT currently dominates taxation systems. 21 of the 35 associations who participated in the survey cite VAT as being applied in their country. 33 per cent of respondents, however, benefit from a lower VAT rate on the lodging industry, whereas 52 per cent have experienced an increase in VAT over the last five years.

The survey documents in detail lobbying strategies used by national hotel associations in opposition to government attempts to impose excessive taxation. The results represent an instructive source of data for national associations elsewhere, in their lobbying efforts with governments and taxing authorities.

Among the case studies featured in the report is that of New York State, where a 5 per cent occupancy tax was imposed in 1990 on hotel room rates of over US - in addition to other state and local government taxes. A survey carried out over 4 years by the local and New York State hotel associations showed that a 5 per cent increase in room rates results in a 2.5 per cent drop in demand.

This, in turn, resulted in lower revenues and therefore decreased tax revenues overall for New York State, an argument that helped convince it to repeal the additional occupancy tax in 1994.

New taxes impacting hotels, the study reports, include a tax in Germany on disposable packaging used in catering products. 15 local authorities imposed this tax during 1995, and as many as 500 others are expected to follow their example. The tax aims to make consumer practices more environmentally responsible and is imposed on the sales price, in addition to 15 per cent VAT.

In 1996 the hospitality industry in Denmark is anticipated to pay over US.6 million in environmental taxes (turnover was approximately US.6 billion in 1994). The IHA predicts that as environmental awareness increases worldwide, similar taxes can be expected to be levied in other countries.

The IHA Taxation Survey was compiled with the assistance of HOTREC (Confederation of National Hotel and Restaurant Associations in the European Community).