Spanish holiday prices for British tourists to soar
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New austerity measures announced in Spain this week are set to push holiday product prices through the roof - affecting millions of British tourists.
Spain is the most popular destination for UK families and the increased sales taxes will affect around 15 million holidaymakers a year.
From 1 August, the tax on food and drink in hotels, bars and restaurants will rise by two percentage points to 10%, along with hotel room charges.
The VAT will go up by three percentage points to 21% on many items like clothing, sunglasses, and cigarettes.
According to the report in the Daily Mail, a family now paying £1,080 for a two-week hotel stay would see the cost go up £20 to £1,100. If a holidaymaker spent £590 on items subject to VAT, that would go up to £605, an increase of £15.
The tax hikes will no doubt put up the cost of package holidays to Spain, and the country's Tourism Commission warned the sector could lose £1.7 billion owing to the tax rises announced by Prime Minister Mariano Rajoy.
However, amidst the bad news, The Sunday Times recently highlighted a positive for the British holidaymaker.
As the financial crisis has left less Spanish people able to travel, some four and five star hotels have been offering much lower prices.
Ted Wake of Kirker Holidays told the Sunday Times: "Numerous hotels, especially in the south, have been dependent on rich people coming from Madrid and the north for the summer. These clients aren't booking this year, and the hotels have decided to make dramatic cuts in order to generate turnover."
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