Dermot King said the UK’s hospitality industry found it difficult to match the financial appeal of foreign destinations due to the tax burden it faced.
He told the Mail on Sunday that a reduction in VAT would send a “great message for families” and that if Westminster measured the effect, it “would see the difference”.
He added that so far ministers had been reluctant to cut tourism VAT.
“If the government finds a full VAT cut too expensive, one thing it could do to test whether it works is to reduce VAT for school holidays,” King said.
King, who is also a director of Butlin’s owner Bourne Leisure which also runs Haven and Warner Leisure Hotels, is among a number of industry chiefs backing a British Hospitality Association campaign to lower the rate of tourism VAT from 20% to 5%.
He compared VAT rates in the UK with other European tourist cities.
“If you stay at a hotel in Clacton you are charged VAT at 20% for the privilege. But in a Barcelona hotel you’re charged just 10%,” he argued.
King said he believed a zero rate of VAT for the hospitality industry would “create 100,000 jobs and give a return in just three years.
“For those reasons I urge the government to think about its tax strategy,” he said.
According to the Mail on Sunday, Britain’s tourism sector is the country’s fourth-largest industry and worth £127 billion each year and responsible for employing 10% of the UK workforce.
King added: “If you want to rebalance the economy then tourism is the easiest industry to grow. It can create jobs fast, especially for young people, and that growth wouldn’t be sucked out of another part of the economy.
“You are persuading more British families to stay at home and more overseas families to holiday here.”
