A new tax in London could halt the development of new hotels in London’s boroughs, Travelodge has claimed.
The budget hotel chain has hit out against the increased Community Infrastructure Levy (CIL) which will set the company back GBP27 million to build its new properties in normally non-tourist areas of London.
Travelodge’s managing director Paul Harvey has written to Eric Pickles calling for a review into the fees and warned the Government of putting hundreds of new jobs at risk if its new hotels are not opened.
In Islington, where Travelodge is planning to open seven hotels, the charge has jumped from GBP1.7 million to GBP5.9 million in the new structure, which sets rates by per square metre.
“This additional development charge is being interpreted by some London boroughs as a quick win revenue generator, when in reality by setting such high rates, they are actually losing out on long term growth, revenue and job opportunities. It is unviable for companies such as ours to invest in new developments as a direct result of this extortionate charge,” said Harvey.
“The levels of tax being proposed by a majority of London boroughs rule out future hotel development and job creation. Therefore Eric Pickles must recognise the damage that the poorly thought through CIL levels will have on future economic growth, and he needs to stop Councils implementing such harmful rates of tax,” he added.
Travelodge has a total of 95 hotels in its pipeline in 19 boroughs that would create 2, 600 jobs.
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