Agency fees and VAT hit UK hotel prices

HOTEL guests are paying hundreds of millions of pounds in commission fees to booking agents for little in return, according to experts.

Guests who reserve rooms via agents are paying over the odds because hotels have to pay 15% plus VAT on their gross revenue for each booking, the co-authors of the Good Hotel Guide 2014 said.

Adam Raphael and Desmond Balmer said the hospit a l i t y i ndustr y ’s increasing reliance on webbased third-party agents was a principle cause of price inflation.

It came as the book named the Kylesku Hotel in Sutherland as the best hotel in Scotland. The 17th century former coaching boasts stunning views of Loch Glendhu & Loch Glencoul.

For small owner-managed hotels, commission fees inflated costs at the expense of guests who were unaware they would usually get a better deal by booking directly.

The editors said the growing power of third-party agents stemmed from internet search results being dominated by marketing companies.

They added: “Many hotels claim that they have to use booking agents to fill empty rooms but few analyse whether they really bring additional guests or merely cream off revenue. Some hotels are now providing incentives for guests who book directly.

“Booking agents not only take commission fees, but often also impose expensive conditions. Promotional costs are rapidly increasing. They explain in part why the cost of staying in hotels in the UK remains stubbornly high, much higher than in other European countries.”

The guide listed 10 “bestof-the-year” award-winning hotels, including an establishment run by travel writer Gill Charlton, a B&B called Ennys, near Marazion in Cornwall.

The editors said: “Gill Charlton, who bought the house in a down-trodden state, has lavished as much care on restoring the building as she has on looking after her guests.

“A seasoned traveller, she understands what guests need and provides warm, generous hospitality.”