Everyone will lose out when VAT is introduced in the UAE and Saudia Arabia according to the newly appointed CEO and president of Movenpick Hotels and Resorts.
Olivier Chavy made his comments at the Arabian Hotel and Investment Conference (AHIC) that took place in Dubai’s Madinat Jumeirah last month.
“I think that everybody will lose. It will have an impact on the employee, the proprietor, and it will impact everybody. The clients and the employees will take a hit; I don’t think anyone will win at all,” he said, before lamenting a lack of clarity about the introduction of Value Added Tax (VAT).
“There are too many uncertainties here to have a firm opinion. There is not enough detail and we don’t know how strategically we might be able to offset this against x, y or z.”
He said that when VAT is introduced everywhere, people will have no choice but to get used to it.
“People still will travel. What you will see is a shift from luxury hotels to upscale hotels, from upscale to midscale hotels or some people will still come but they will stay in a budget hotel,” he said.
“We still have another eight months, we are watching it carefully. We want clarification on everything from when does it start to how do we report it? We need to know what does it apply to, does it apply to room rates, does it apply to F&B, does it apply to spa treatments? That has yet to be made clear.”
