English mayors will soon have the power to charge a tourist tax on those staying overnight. This decision sees responsibility in England devolved to local authorities, like in Scotland and Wales, and allows them to charge visitors a ‘modest’ amount. The levy will help fund events or improve public transport.
Scotland will introduce a 5% tax next year, while Wales will charge an extra £1.30 per night. Similar tourist taxes already exist in European cities like Paris, Barcelona and Amsterdam—in France, it starts at 50p per night. So there’s no guarantee that every region will charge the same.
Where will the tourist tax apply?
London’s Sadiq Khan and Greater Manchester’s Andy Burnham have already welcomed the news as good for their cities. Meanwhile, the Mayor of York and North Yorkshire, David Skaithsaid it would be a “game changer”, and West Yorkshire Mayor Tracy Brabin said she is “delighted”.
Other supporters of the tourist tax include Helen Godwin, the West of England Mayor and Liverpool City Region Mayor Steve Rotheram. In Manchester and Liverpool, a legal loophole (using an Accommodation Business Improvement District) has already seen local councils introduce a sort of tourist tax.
Not everyone’s so happy. Tees Valley’s Mayor Lord Houchen said he would not introduce the new tax: “I won’t be using this power. There will be no tourist tax in Teesside, Darlington and Hartlepool for as long as I’m mayor. Thanks, but no thanks.” With 14 English mayors, it’s up to them to decide how and if it happens.
What are the pros and cons of a tourist tax?
While some worry a tourist tax may be off-putting for tourists, research in cities where they already apply suggests that reasonable fees have minimal impact on visitor numbers. Better yet, recent research suggests a tax of £1 a night in London. Research suggests a levy of £1 per day in London could raise £91m a year to reinvest, while a 5% levy could raise £240m.
Andy Burnham said it’d allow Greater Manchester to invest in “keeping our streets clean and enhancing our public transport system through later running buses and trams, making sure every experience is a positive and memorable one.”
However, Kate Nicholls, chair of UKHospitality, raises concerns that this “damaging holiday tax… will be passed directly on to consumers, drive inflation and undermine the government’s aim to reduce the cost of living.” She says it could cost the public up to £518m.
A 12-week consultation is now running until February 18 for businesses to have their say on how a tourist tax should operate.
