The majority of leisure businesses in London's congestion charging zone believe that the £5 charge has had a negative effect on trade.
In a report published by the Royal Institution of Chartered Surveyors on the first anniversary of the scheme, 75% of leisure operators, including restaurant and hotel owners, said the charge had reduced custom.
Hotel and restaurant owners in Kensington & Chelsea and Westminster will be eyeing the report with concern after London Mayor Ken Livingstone announced that the scheme could be extended to cover most of those two boroughs.
Under the proposals, an area roughly bounded by Harrow Road, Scrubs Lane, West Cross Route, the Earls Court one-way system and the Chelsea Embankment would fall within the charging zone.
Transport for London (TFL) claims that since congestion charging began traffic delays in the zone have been reduced by 30% and some £70m extra revenue has been generated. Overall traffic is down by 17%. A spokesman for TFL said: "From a business point of view it must be stressed that the overall number of people entering the zone has fallen by only 4,000, set against the 1.6 million who enter the zone every day."
The announcement on extending the zone begins a 10-week period of consultation in which 3.3 million households, 250,000 businesses and 1,400 other stakeholders will be invited to offer their comments. The earliest any change could come into force would be 2006.