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US TAX INCREASE TO AFFECT TRAVEL

CORPORATES LOOKING FORWARD to economic recovery have been warned that any upturn will bring a disproportionately big increase in US trip costs - thanks to a raft of new and increased travel taxes.

The tax burden has gone largely unnoticed so far, says the US-based National Business Travel Association (NBTA), because the recession has driven hoteliers, restaurateurs and car rental companies to slash base prices. Since the taxes are based on a percentage of the price paid, the average total tax revenue per trip has actually fallen by 53 cents over the past year.

However, falling revenues have prompted US city fathers to increase rates and invent new levies - targeting hotel stays, restaurant meals and car rentals, in particular - in the hope of supplementing the income they receive from general sales taxes.

Fay Beauchine, chair of the NBTA's education and research foundation, warned: "When the economy recovers, travellers will take a double hit of rising prices and exploding taxes due to tax rate increases enacted during this downturn."