You Must Be From Away

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The FDP, Germany’s Centre/Liberal party was elected into the current coalition government on a platform of slashing subsidies and cutting taxes.

Fine with me, but I wish they’d thought it through.

As from January 1, the VAT/GST on accommodation has been halved to demarginalise the German hospitality industry vis a vis the neighbours.

And the hoteliers are going to pass the savings on to consumers.

Yeah right.

Why do hotels like Econolodge/Motel 6/Budgethost/Super 8 have neon pricing on their signs?

Correct – so that they can change prices at an instant.

Why do hotel chains use Dynamic Pricing?

Correct – so that they can change prices at an instant.

So if a hotel room costs – nominally – €100 pre tax and VAT is 20%, the room costs €120.

Cut VAT to 10% and the room costs….€120 because the chain will happily take the €10 on offer and thank-you-very-much.

And the consumer has NO IDEA what a hotel room costs at Hilton/Marriott/Hyatt because the room rates are up and down all the time like a whatsit’s knickers.

Week-end rate, prepay rates, don’t-like-the-shape-of-your-nose rates. Whatever.

“Actually, sir” they’ll say “the rate used to be €133 with VAT at 20% and we’ve now cut it to €120″

Just how stupid do they think we are…?