July 29–Budget hotel chain Travelodge warned today that nearly half of its planned hotels in the capital could be rendered “increasingly unviable” as it faces an “extortionate” pounds sterling 27 million tax hike from London boroughs.
The company has a pipeline of 95 hotels in London but is facing the huge potential bills from the community infrastructure levy planned or already in force in 19 boroughs.
Under the levy, which came into force in April 2010, local authorities can raise funds from developers undertaking projects in their areas to fund required infrastructure.
But Travelodge warned that the councils were treating the levy as a “quick win revenue generator”, with the company facing an extra pounds sterling 5.9 million bill in Islington alone, where it plans seven new hotels.
The company will continue to assess hotels individually but said Islington, Kensington & Chelsea, Brent, Lambeth, Southwark, Tower Hamlets, Croydon and Barnet _ accounting for 44 planned hotels _ could be “increasingly unviable”.
Managing director Paul Harvey said: “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.”
