30 June 2009

Operator hopes French VAT cut will lure Brits back

VAT cuts in restaurants and cafés in France will help offset the weakness of the pound against the euro and encourage more UK holidaymakers, a specialist operator hopes.

VAT on all restaurants and cafés in France will be cut from 19.6% to 5.5% from Wednesday (July 1).

French accommodation operator P&V estimates this will translate into a saving of approximately 10% when passed onto customers.

A meal typically costing €15 (£13) will be reduced to around €13.20 (£11.40).

The company also hopes the VAT reduction will make French ski resorts more affordable after they faced criticism last winter for inflated prices.

The operator has also introduced discounts of up to 45% on all properties until November to help stimulate demand from families.

P&V’s ‘Eurobuster’ campaign is basing its prices on the euro to sterling exchange rate of summer 2008 (£1 to €1.28), when holidays were around 22% cheaper than earlier this month (£1 to €1.05).

UK sales and marketing manager Cathy Rankin said: "We are proactively trying to offset the effects of the weak pound by introducing ‘Eurobusting’ offers of up to 45% off all of our properties in the summer break.

"The VAT cut in restaurants compliments this as many of our customers rely on good value local restaurant food during their stay."

Nicolas Rochedy, who runs the Chabichou hotel and restaurant in Courchevel in the Three Valleys, which has been awarded two Michelin stars, said: "It is important for us to support British skiers, particularly in the current climate.

"From December, we will be passing on the VAT reductions to all of our customers.

"Although some products are exempt from the cut, such as alcohol, the majority of our most popular dishes will be reduced for the customer.

"Skiers will therefore notice that their lunchtime meal, bottled water and cup of coffee will be largely reduced from last year’s prices.

"As well as being able to reduce costs for the customer, the VAT reductions will also mean better service and salary increases for staff, as well as more employment at resorts.

"We therefore welcome the tax cuts as a way of both improving customer service and encouraging more visitors to the Three Valleys - a view that is shared by other hotels and restaurants in the region."

by Phil Davies