‘Tourist tax' on the way?
‘Tourist tax' continues to be the hot topic of conversation for M&E professionals, even more so as Edinburgh became the first city in Scotland to agree to a tourist tax last week which will come into force next year.
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The UK government has been discussing whether a tourist tax could be a solution to make up budget shortfalls.
The plan, reputed to be worth around £1bn by the Taxpayers Alliance, would mean visitors to hotels would pay an additional levy for every night’s stay in the UK.
Manchester currently operates a £1 per room per night City Visitor Charge (CVC) in the UK while other towns and cities are looking at something similar.
And the Labour government in Wales wants to bring in a £1.25 per night tourism tax from 2027.
This sort of levy, dependent on size and expense of the accommodation, is already common around Europe.
But MICE sector leaders have argued the tax could scare off potential customers from choosing the UK for their events and incentives trips.
The Meetings Industry Association CEO, Shonali Devereaux, told C&IT magazine:
"Business events are already preparing for the impact of increases in National Minimum Wage, Living Wage and Employers’ National Insurance from April, with an increase in residential rates expected over the coming months. The added consideration of a hotel tax will inevitably increase the cost of attending business events, which could have the unintended consequence of reducing the number of business travellers to the UK, as event organisers opt for hybrid or virtual solutions, or even host events overseas."
And Clermont Hotel Group CEO, Gavin Taylor, agreed saying: "While we appreciate the government's need to consider all options to increase revenue, we are concerned about another potential headwind impacting the hospitality industry."
The tax was aimed at cutting down on tourism in some European countries which, in turn, encouraged more sustainable tourism thanks to fewer visitors to a particular location.
Cities such as Venice have noted their daily tourism tax has had no notable impact on the number of visitors they see each year.
Amsterdam adds 12.5% on top of accommodation bills, which raises 265m Euros (£220m) a year and reports that there has been no downturn in visitor numbers.
It remains to be seen whether the Government will make this move to help balance the books – we’ll just have to watch this space…