Profit loss of up to 80% for hotels in border region due to VAT increase

Koninklijke Horeca Nederland (KHN) is very concerned about the impact of the VAT increase on accommodation from 9% to 21%, especially for hotels in the border regions. New research by CELTH and Decisio shows that around 900 of these businesses, mostly family-run hotels with few business guests, can expect a loss of profits of up to 80%.

KHN expects a big impact especially for hotels without, or with a limited share, of business guests in the lower segment. These hotels often have small margins and price-sensitive guests. In addition, they have to compete with hotels just across the border in Belgium and Germany, where the VAT rate is considerably lower (6% and 7%). KHN is therefore once again calling on the cabinet to reconsider the measure. The report has since been shared with MPs on the Finance and Economic Affairs dossiers.

Bankruptcies and pressure on regions

For many family hotels in the border region, the VAT increase means that their profits virtually evaporate. Investments in sustainability or innovation are then no longer possible. Moreover, this drop in profits makes the likelihood of bankruptcies among these hotels high. This not only makes entrepreneurs disappear, but also puts pressure on the liveability of village centres. 

Besides the direct impact on the hotel sector, a decline in tourism affects other local businesses. This is because fewer hotel guests also means less spending at local restaurants, shops, events and suppliers - and, indirectly, jobs. According to the report, every missed euro in hotel sales means another 60 cents less turnover at other local businesses. 

Call to government

KHN makes an urgent appeal to the cabinet to reconsider the VAT increase. The proposed measure not only affects entrepreneurs, but also undermines liveability and employment in regions outside the big cities. We are happy to help think of alternatives that do justice to entrepreneurs, regions and SMEs. A healthy entrepreneurial climate in all parts of the Netherlands is essential for a strong and balanced society.