UK tour operators have called for a VAT reduction ahead of the Chancellor’s Autumn statement, saying the UK is missing out on visitors.
They cite Visit Britain analysis that between 2006 and 2011 the UK lost market share in 28 out of its top 33 markets by visitor volume.
Tourism is sixth-largest export earner for the United Kingdom and the only sector whose exports are subject to VAT.
Nick Varney, chief executive of Merlin Entertainments plc said: "Price competitiveness is the single biggest obstacle to more international visits and more people holidaying in the UK.
"A reduction in VAT on tourism would go a long way to improve our international standing and help ease the cost of living burden for staycationers."
Dermot King, director of Bourne Leisure, said: "Youth unemployment remains stubbornly high and nearly a million young people are unemployed.
"Our sector is a major provider of jobs and careers for young people, and we would be able to offer a greater number of opportunities if Tourism VAT was brought into line with our EU rivals."
The Campaign for Reduced Tourism VAT represents over 3,500 individual establishments in the hospitality sector and over 40 national/regional associations.
It seeks a level playing field with the UK’s tourism competitors in the EU which apply VAT at reduced rates – for example 7% in Germany and France for accommodation, compared to 20% in the UK.
