News, Tips & Bargains : A Starry Story at French Hotels

Nothing brings a smile to the face of a French chef so quickly as the prospect of adding a Michelin star or a GaultMillau toque (baker’s hat) to his or her nameplate.

But, for some years now, French hotels have tried to avoid being tagged with the government tourism ministry’s top rating--a “luxury” four-star. That honor may have been good for the image, but there were thorns in the crown, the sharpest being the 18.6% French VAT that they were forced to tack onto guests’ bills. All the other hotels in the country, from one-star up to (non-”luxury”) four-star, could get away with a 5.5% tax.

But this year the government quietly did away with the four-star “luxury” category--and, effectively, the higher tax on those hotel rooms. The top hotels, hit hard by the worldwide recession, had lobbied for the change. And many were reluctant to upgrade their facilities for fear of an increase in room rates due to the tax.

In fact, few hotels carried the top rating and many had purposely taken steps to avoid it. Only four Paris hotels--the Georges V, the Hotel de Crillon, the Scribe and the Meurice--were “luxury four-star” facilities, a rating due mostly to the size of their rooms. (Each room had to be at least two square yards larger than an “ordinary” four-star hotel room.)

Now France has 505 hotels, one-fourth of the total, in the four-star category. That amounts to 37,000 rooms, a drop of more than a third in the past decade due to the disappearance of big-spending business executives, mostly from the Middle East countries. The average price of a four-star hotel in France today is $230 per room, per night.

Having won their battle against the higher taxes, many of the top hotels now are asking the government to introduce a five-star category, at the lower tax rate. And the government seems so inclined.

Meanwhile, the mayor of Paris, in a bid to raise money for developing business tourism, this year instituted a special accommodations tax in France’s largest city. But few tourists will notice the new taxe de sejour , which will range from about 17 cents a night per person at campsites to $1.20 a night in the most luxurious lodgings.