Why are holidays in the UK so expensive?

For many Britons, the cost of a UK holiday has become a source of growing frustration. With accommodation prices soaring, restaurant bills climbing and even a pint of beer carrying a hefty price tag, an increasing number of families are deciding they can get better value by heading overseas to destinations such as Spain. So why has holidaying at home become so expensive? The Daily Mail spoke to tourism leaders and hospitality experts to find out what's driving up the cost of a Great British getaway – and whether anything can be done to bring prices down. First and foremost, the cause is simple: tax.The World Travel and Tourism Council cites high tax rates as the key cause for the UK's lack of international competitiveness - it is the only country in Europe not to have a lower rate of VAT for tourism. For instance, short-term holiday accommodation in the UK carries a 20 per cent VAT rate - stark in comparison to 7 per cent in Germany and 10 per cent in France, Spain and Italy. The price of UK holidays is on the up, making vacations increasingly unaffortableThis means the cost of things like accommodation can appear higher than overseas.Rising operating costs also play a major role Hugh and Steve Ridgway, the co-owners of the St Moritz Hotel & Cowshed Spa in Trebetherick, Rock, Cornwall, are one such pair greatly affected by the UK economic situation.Hugh told the Daily Mail: 'We’ve had two disastrous Rachel Reeves budgets, which alone have added £150,000 a year to our St Moritz Hotel cost base just for our around 85 year-round team members. Hotel owners Steve and Hugh (right) Ridgway have been affected by government policies'Then you add in energy. As a UK business, we are paying up to four times more for our energy than our hotel colleagues in the USA. 'And quoted sources say we’re paying anything between 30 per cent and 100 per cent more than our hospitality competitors on the Continent.'Energy and people are at the core of everything we provide for our guests. This means that the cost of our UK food is far greater than on the Continent, the cost of UK drink is so much higher, the cost of building, maintenance, everything costs us more. 'Then take our round-the-clock laundry costs. Not only have we got the crazy double whammy of massively increased electricity costs and people costs, we also then have to add our stupidly high water and sewerage costs.'The situation has worsened in recent years.Mark Warren, Newquay Business Improvement District (BID) manager, said: 'Over the last few years businesses have been hit by successive increases in operating costs. Energy prices rose dramatically, food inflation has remained high, staffing costs have increased and additional tax burdens have been introduced. While the UK has beautiful destinations, such as Newquay beach in Cornwall, Brits are turning their attention to international trips as a result of soaring costs'Sadly, we're also seeing businesses close their doors, particularly in hospitality, pubs, cafés and the evening economy. These aren't isolated cases - they're becoming increasingly common on our high streets.'And now the Government is proposing to make it worse - with a new holiday tax.The Holiday Tax Bill now permits mayors to introduce a levy on overnight stays. The fee would apply to visitors' overnight trips, and it would be up to mayors and other local leaders to introduce a modest charge if it's right for their area. Kate Nicholls, chair of UKHospitality, said: 'The UK is home to some of the world's best hospitality, leisure and tourism businesses, but they are suffering from one of the highest tax burdens in the UK. Businesses are no longer able to absorb ever increasing costs, and that means they have to unfortunately pass them onto consumers.'The Government is proposing to increase that burden even further with its proposed holiday tax, which will further hike the costs of the great British holiday. 'Rather than increasing the cost of a staycation, the Government should be bearing down on inflation and the cost of living by reducing hospitality's cost burden through cutting hospitality's VAT to 10 per cent and stopping the holiday tax.'The 'cost of doing business' is increasing overall, Mark explains, adding: 'Hospitality operators, hotels, restaurants and visitor attractions have all seen significant increases in their operating costs over recent years. Those costs inevitably have to be passed on to customers.'Businesses are dealing with higher employer National Insurance contributions, increasing wage costs, rising food and energy prices, business rates, insurance, and higher VAT on hospitality than many competing European destinations. 'The result is that UK businesses simply cannot absorb these increases indefinitely, so accommodation, food and entertainment all become more expensive for holidaymakers.' Accommodation in the UK is also rising, with popular spots such as the Cotswolds no longer easily affordableOther factors contribute, too. There is no doubt UK train prices soar above costs in nearby European destinations.There's also the matter of timing - prices soar during the school holidays as that's when everyone can travel.In Germany, different states stagger their holiday dates to avoid this issue - and there's an argument for the positive effects this could have if the UK followed suit. Indeed, according to a YouGov survey, nearly half of British parents (45 per cent) have taken their child out of school for a holiday during term time.Lower costs are the biggest motivator, with 53 per cent citing cheaper travel and 42 per cent citing cheaper accommodation as reasons for taking term-time holidays.Taxes, school holidays, food, accommodation and transport costs all make for a perfect storm. Meanwhile transport within the UK is extortionate, especially in comparison to other countries across EuropeSo, what needs to change - and what happens if it doesn't? If we want to reduce prices on UK holidays, an 'easy win,' according to Hugh, would be cutting VAT across hospitality. He adds: 'There’s common sense mathematics of a serious VAT drop, and their immediate benefits for the jobs market are well documented. 'We need sensible levels of National Insurance. In fact, National Insurance needs looking at overall. Our ridiculous tax system needs sorting out and we need to reverse out of the Governmental-obsessive welfare cul-de-sac and actually consider how we drive the working people of this country forward.' Ed Maughan, managing director of GroupAccommodation.com, has weighed in on the matteEd Maughan, managing director of GroupAccommodation.com, told the Daily Mail: 'There are multiple campaigns in flight, not least the #VatsTheProblem campaign from UK Hospitality, trying to help the sector and keep more tourists spending their hard-earned cash in the UK economy rather than overseas. 'The UK Government needs to recognise that unless it helps domestic operators across the whole hospitality industry, more and more UK tourism spend is going to flow offshore.'Mark added: 'The UK has some of the most beautiful destinations in the world, but if the businesses that create those visitor experiences continue to disappear, we'll damage the long-term sustainability of our tourism industry.'Hugh's warning is stark: 'If we don’t get the right people, with the right attitudes and the right approaches towards the hospitality sector, then our industry is simply going to wither on the vine. No-one in their right mind will keep investing in a proposition that is unsustainable. 'UK customers and guests will smartly vote with their wallets and enjoy spending their hard-earned cash in what they see as better value-for-money European competitors.'