VAT news and experiencesQuality issues and classificaton

By Dániel MakayHOTREC

Hotels, Restaurants & Cafés in Europe

CroTOUR – 10 May 2012

Contents:

I. Brief introduction to HOTREC

II. VAT and experiences

III. Quality issues at EU level

IV. Classification – Hotelstars Union

CroTOUR – 10 May 2012

I. Brief introduction to HOTREC

Represents hospitality industry at European level

43 National Associations

in 26 European countries

CroTOUR – 10 May 2012

European hospitality sector in the EU-27

1,7 million enterprises

9,5 million persons employed Compare! Automotive production: 2,2 million

Chemical industry: 1,9 million

195 billion EUR value added Compare! Automotive production: 155 billion EUR Chemical sector: 194 billion EUR

I. Brief introduction to HOTREC

CroTOUR – 10 May 2012

European hospitality sector in the EU-27

99% of enterprises employ < 50 people these 99% make up 62% of value added 92% of enterprises employ < 10 people

I. Brief introduction to HOTREC

CroTOUR – 10 May 2012

Background:

Current situation with regard to VAT in the EU:

1 standard rate of not less than 15%

1 or 2 reduced VAT rates of not less than 5%

Reduced rates can be applied to inter alia to• Accommodation services• Restaurant services

II. VAT and experiences

CroTOUR – 10 May 2012

Background:

Future of VAT in the EU ???

Commission Communication on future of VAT

Announcement:• Assessment of the current VAT rates structure• Proposals by end of 2013

Remember: Unanimity is required in the Council

II. VAT and experiences

CroTOUR – 10 May 2012

II. VAT and experiences

CroTOUR – 10 May 2012

II. VAT and experiences

CroTOUR – 10 May 2012

EU countries applying a reduced VAT rate to hotel services

II. VAT and experiences

CroTOUR – 10 May 2012

II. VAT and experiences

CroTOUR – 10 May 2012

EU countries applying a reduced VAT rate to restaurant services in 2012

II. VAT and experiences

CroTOUR – 10 May 2012

EU countries applying a reduced VAT rate to restaurant services in 2013?

II. VAT and experiences

CroTOUR – 10 May 2012

Recent changes in rates in the EU countries

Lots of hikes and decreases in recent years, due to the economical and financial situation

• Increases – mostly the need to consolidate budgets

• Decreases – different reasons

II. VAT and experiences

CroTOUR – 10 May 2012

Germany

VAT rate on accommodation services19% 7%

Reasons:• Enhance competitiveness of accommodation industry

Results:• Investments of above one billion euro• Creation of thousands of new jobs• Increase of salaries

Germany

VAT rate on accommodation services19% 7%

Reasons:• Enhance competitiveness of accommodation industry

Results:• Investments of above one billion euro• Creation of thousands of new jobs• Increase of salaries

II. VAT and experiences

CroTOUR – 10 May 2012

Ireland (July 2011)

VAT rate on hotel and restaurant services13,5% 9%

Reasons:

• Revive the economy overall• Reduce prices• Boost tourism

Assessment after one year

II. VAT and experiences

CroTOUR – 10 May 2012

Lithuania (January 2011)

VAT rate on accommodation services21% 9%

Results:

• 5,5% more employees• 21,2% more visitors to Lithuania• Restoration of competitiveness with neighboring

countries

Nonetheless put back to 21% in 2012

II. VAT and experiences

CroTOUR – 10 May 2012

Finland (July 2010)

VAT rate on restaurant services22% 13%

Reasons:• Lower prices• Increase employment

Results:• Prices dropped by around 5%• Production and employment grew by around 3%

II. VAT and experiences

CroTOUR – 10 May 2012

Sweden (from January 2012)

VAT rate on restaurant services25% 12%

Reasons:

• Facilitate employment of young people

• Boost tourism

II. VAT and experiences

CroTOUR – 10 May 2012

Benefits realised with reduced VAT rates

• Investments in the sector: other sectors benefit as well

• Modernisation of the establishments

• Enhancing competitiveness

• Better price/quality ratio

• Better employment conditions

• More resources for training

• Promotion of historical/culinary heritage

• Equal treatment with other food products

II. VAT and experiences

CroTOUR – 10 May 2012

HOTREC calling on all European countries to

maintain / introduce reduced VAT rates for the

hospitality industry!

III. Quality

CroTOUR – 10 May 2012

Commission initiative for a European Tourism Quality label

Expectations from the industry• Quick and unbureaucratic process• Strong commitment of the Commission for marketing

Reality:Formal legislative proposal to be expectedDiscussions in Council of Ministers and European ParliamentNo clear commitment with regard to marketing

HOTREC’s existing system: European Hospitality Quality scheme

IV. Classification

CroTOUR – 10 May 2012

IV. Classification

CroTOUR – 10 May 2012

Features:• 11 countries (for the moment)• 18.000 classified hotels• A market of 150 million inhabitants• Common sign• 270 common criteria (to 99%)• Avoiding mandatory architectural criteria• Free test classification• Acceptance by Online Travel Agents

THANK YOU FOR YOUR ATTENTION!

www.hotrec.eu

CroTOUR – 10 May 2012