Tudor Court Hotel News Section

Two new EU regulations that came into effect on January 1 have forced travel operators and agents to reevaluate their VAT responsibilities.

One of the two significant alterations concerns the Tour Operators’ Margin Scheme (TOMS), opting for which was pro-choice earlier and which has now been deemed mandatory.

A VAT invoice must also be issued against an overseas supplier by agents who deal with them directly. Agents should reveal the commissions earned from each supplier every quarter. Also, sub-agents would have to charge overseas hotels with UK VAT on their commission from bed banks.

Fines would be inflicted on those travel companies that do not adhere to the norms of the regulations.

Grant Thornton VAT Manager, Damon Wright said that an enquiry by Her Majesty’s Revenue and Customs (HMRC) would be held later this year, in this regard. He also urged travel companies to seek advice from a VAT specialist at the earliest and expressed hope that the HMRC would be practical in its evaluation.

David Bennett, Saffery Champness VAT partner, advocated the need for more clarity on the altered VAT rules.

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A new rail link connecting London’s Marylebone station and Oxford has been announced. Chiltern Railways will be in charge of this project. Planned for completion by 2013, the rail link will involve construction of 0.5 miles of fresh track.

For Chiltern, the link will be an integral part of its £250 m expansion plan, which also involves an improvement of the route between Birmingham and Marylebone. The project will upgrade more than 50 miles of track to 100 mph running, thereby reducing travel time by around 20%.

Financed by Network Rail, the cost for the project will be reimbursed by Chiltern Railways in 30 years’ time, through a “facility charge”. Any future franchisee will have to take up the repayment responsibility.

Adrian Shooter, Chairman of Chiltern Railways, said that this was the biggest passenger rail project not involving the taxpayer for support. He also said that the contract with Network Rail reinforced the fact that true advancements in rail services were possible without public funding and by pulling people out of their personal vehicles onto the trains.

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Travel agents are dissuading customers from booking their flights with British Airways (BA) and are instead recommending competitor airlines. The rebuff has been triggered by reports of fresh strikes being planned by BA’s cabin crew.

Nicholas McKay, Managing Director, Travel Designers, has said that he was locating new flights with costlier competitor airlines for nearly 20 BA customers scheduled to fly in March. McKay says that he puts customer service above costs.

John Allan who owns John Allan Travel recounts his experience of booking flights for one couple going on a Maldives trip on an alternative SriLankan Airlines flight, after the travellers expressed their indifference towards shelling out £300 more. Allan believes that many customers are more concerned about having an anxiety free trip.

Bryan Bath, Managing Director, Bryton Travel says that he has absolutely no confidence in BA and, hence, prefers cautioning his customers about the strike. Bath is, however, not too gung-ho about switch-selling.

At BA’s end, Willie Walsh, Chief Executive has urged the airline’s UK ground staff to double up as cabin crew, if the need arises.

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The trivago Hotel Price Index (tHPI) depicts the average accommodation rates for January 2010 to be twelve percent less than January 2009 and one percent less than December 2009. Geneva, the most expensive city in 2009, is currently 158 pounds, ten percent less than this time last year.

Many European countries are mirroring this trend of receding hotel prices. Wales at 78 pounds, Ireland at 85 pounds and Scotland at 87 pounds provide the cheapest hotels in Europe. However, in the United Kingdom the prices have shown a marginal rise, an increase of two percent, as compared to December 2009.

Hotels in England have proved to be most dear, with rates for January at 93 pounds. With a regular double room costing 11 percent less than January 2009, Glasgow has registered the largest cut. Birmingham is the only city in the United Kingdom to see an increase in hotel prices in January.

The trivago Hotel Price Index is based on the data collected from hotel chains and 53 online travel agents. The index also estimates hotel accommodation prices for the coming month.

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A new study conducted by the Center for Hospitality Research (CHR) has inferred that the probability of hotel guests finding changes in hotel rates reasonable increased, when they knew exactly what parameters triggered the changes.

The study was carried out at the Cornell School of Hotel Administration by Taylor, a marketing analyst for the Venetian Resort Hotel Casino, under the mentorship of Kimes, a notable professor in Asian Hospitality Management. Eight hundred and fifteen respondents from the U.S. were asked to judge the fairness of eight separate situations involving various hotels.

Kimes said that hotel customers admitted to knowing that changes in hotel rates were inevitable. However, their confidence in its fairness depended strongly on their awareness of the rules that stimulated the rate changes. Other factors such as the hotel brand class and type of trip had very little effect on the consumers’ fairness perception.

Hence, Taylor and Kimes recommend the policy of hotel revenue managers acquainting guests about their pricing strategies through justification of the rates on websites or by encouraging front-desk clerks and reservation agents to do so.

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In the Business Travel and Meetings Show (BTMS) survey of 2,400 business travellers, 57% deemed the latest hike in Air Passenger duty (APD) as “unfair” and 87% “strongly opposed” the subsequent increases planned for November 2010.

In November 2009, the government had raised the APD for short haul economy class from £11 to £12 and for 6000-mile plus premium long-haul flights from £55 to £110, with an increase amounting to £170 proposed for the latter category in 2010.

Online check-in, wifi Internet access, flat beds, notebooks and Eurostar were voted amongst business travellers’ preferred innovations of the last decade. Eighty two percent of the respondents rated mobiles on board as their biggest dislike. Quicker security check-in and immigration processes, supersonic aircraft, miracle child silencer and carbon free travel topped travellers’ expectations for the next decade.

The event director of BTMS, David Chapple termed the noughties as a hotbed for innovation in business travel.

The results of the survey indicate that 73% of people had a sustained or increased rate of business travel in 2009, and estimated this figure to hit 91% in 2010.

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Mike Carrivick, the chief executive of the Board of Airline Representatives in the UK has expressed apprehensions over the introduction of body scanners at Heathrow and all other UK airports. Carrivick stated that while these additional safety measures, initiated by the Department for Transport (DfT), might restore the confidence of travellers by covering them from shrewd terrorists, the resultant prolonged check-in-times and waiting at the gates, could decrease the efficiency of UK airports.
Carrivick said that members of the airline industry were to discuss the suggestions put forth by the Home Secretary Alan Johnson, which included enhanced luggage examinations, more sniffer-dogs and extra pat-downs. Carrivick revealed that a current technology assessment at Manchester airport had confirmed that using body scanners as opposed to full body pat-downs might save significant time.
However, airport authorities have said that the pilot system was well appreciated by customers, especially after the unsuccessful bomb attack at Detroit airport on Christmas Day. Figures confirmed that 93% of customers have backed body scanner tests after Christmas, as against 75% before the period.

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