VAT deduction. More congresses and meetings – and thus more jobs for Denmark – would be the result of the 100 per cent VAT deduction for business tourism proposed in the Government’s and the Liberals’ new growth plan. The proposal would enable Scandinavia’s largest congress centre to create up to 300 new jobs annually beginning in 2015.
A reduction of VAT in the tourism industry has been discussed for many years. This week, HORESTA, The Danish Association of Hotels and Restaurants, made a successful push to get a proposed 100 per cent VAT deduction on hotel accommodations included as a part of the Government’s new growth plan.
In practice, this means that VAT can be fully deducted from business travellers’ hotel stays, making the cost of hotel accommodation significantly cheaper.
The current VAT deduction for hotel says is 75 per cent, but a Government decision to adopt the 100 per cent VAT deduction in the new growth plan would make a significant impact on the tourism industry, as past experiences with VAT deductions have shown an increase in overnight stays and jobs.
Based on current figures and assuming adoption of the proposal, Scandinavia’s largest congress centre, including the hotels Bella Sky Comwell and Crowne Plaza Copenhagen Towers, could contribute to creating no fewer than 300 jobs per year from 2015 to 2020.
This growth will be generated if the current enquiries regarding international congresses and conferences at Bella Center, which represent DKK 1.5 billion in direct and indirect revenue, are converted into confirmed events.
CEO of the Bella Center Group, Allan L. Agerholm, is one of the many members of the tourism industry who applauds the proposal in the Government’s growth plan, and he praises the Government and the Liberals for seeking to give the tourism industry a boost, as this is one of the most important initiatives for making Denmark even more competitive in the international market.
Agerholm comments: “There is no doubt that a 100 per cent VAT deduction for hotel accommodation gives Bella Center a more favourable position in negotiations to win contracts for major events, while strengthening our competitiveness. We are confident that the initiative will have an even greater effect than the Government’s and the Liberals’ slightly conservative estimates. The positive effects will not only be seen in the tourism industry, but also in other industries such as transport, retail and cleaning.”
Denmark has been under pressure for years in the market for congress and conference destinations, and here at Scandinavia’s largest congress venue, we see that price is often a deciding factor when choosing a destination for major events.
“If the proposal is adopted, we can give our international customers a cheaper option, as they will save 5.9 per cent of the cost of overnight stays, bringing us closer to our competitors’ prices. This is key to ensuring that we can attract even more congresses and conferences – and thus more hotel guests – to Denmark,” says Allan L. Agerholm.