Tourism tax: The visitor fee which could transform York – or destroy it

It’s a proposal advocates say could raise millions for the city – and critics say could destroy it.

The idea of a visitor levy, also known as a tourism tax, has been suggested by politicians as a potential source of extra income to boost York’ s economy during financially challenging times. And a consultation on York Council’ s Budget proposals revealed that more than 80 per cent of respondents would support such a charge.

However, hotels, guest houses and York’s hospitality industry body have expressed concerns about how the funds would be used, and the potential deterrent effect on tourists.

Currently, York Council does not have the authority to impose such a tax, and the Government says it has no plans to grant local authorities this power. This comes after the introduction of a five per cent tourism tax on accommodation costs in Edinburgh last year, following the Scottish Government’s decision to allow councils to levy charges.

The initiation of this levy, along with the introduction of one in Manchester through a legal loophole, and attempts to implement it in other locations, have added impetus to efforts to introduce one in York.

What is a tourism tax?

The idea for a tourism tax is based on additional charges imposed in popular holiday destinations like Barcelona, Porto and Prague, where visitors pay an extra fee on top of their hotel bills. For example, in Barcelona, this amounts to €4 (£3.36) per night.

The introduction of tourism taxes on the continent has sparked calls for similar levies in the UK, with Manchester leading the way as the first city to introduce a £1-a-night charge in 2023. However, local councils currently lack the power to implement such a tax themselves, and Manchester’s City Visitor Charge was introduced through legal loopholes.

A Business Improvement District (BID) was established for hotels and other accommodation providers to collect the levy, but attempts to introduce them elsewhere have met resistance.

What do York hotels think?

When asked about their views on a tourism tax, several York hotels, guest houses, and bed and breakfasts expressed mixed opinions. Andy Barnsdale, general manager of The Milner near York Station, warned that a levy could deter visitors to the city.

He said: “The hospitality industry is already facing significant challenges, particularly with the additional financial cost implications from minimum wage and National Insurance increases in April.

“Adding another cost, one that would ultimately be passed onto guests, risks making York less competitive and affordable, further impacting an already financially challenged hospitality industry.”

Meanwhile, Paul Helmsley, of York’s Monk Bridge House guest house, expressed openness to the idea, but he would like to see how the revenue would be used. He said: “Assuming the charge is relatively small and that funds raised are spent in an open and transparent way for the benefit of the city, then in principle I would have no objections.

“If funds just disappeared into city coffers and residents and tourists alike couldn’t see what funds were being used for then I would be against.”

A guest house owner, who wished to remain anonymous, voiced their concerns about the potential increase in administrative tasks for businesses with little to gain. They said: “Does this make us responsible if the guests do not pay? Do we get penalised if guests do not pay?

“There is no guidance nor any apparent consideration for this, I don’t think it would cause the same issues for the larger hotels who have 24-hour reception staff.”

A representative for the Hospitality Association York stated that discussions regarding the proposals had been ongoing for approximately a year, but no advancements had been made. They revealed that no plans had been presented to them for a scheme which would involve businesses voluntarily collecting money from customers.

The spokesperson said: “The introduction of any further costs to our customers will jeopardise the competitiveness of York as a tourist destination, which could negatively impact the local economy and the thousands of jobs supported by our industry.

“The association has always maintained that in the event that a tourism tax is forced upon us, we would like to be heavily involved to ensure that the raised funds are spent on things to benefit the tourism experience.”

Andrew Lowson, York BID Executive Director, stated that businesses in York and beyond are keeping a close eye on Manchester to better comprehend the process of implementing such a charge. He said: “The obvious benefit is that it can introduce new revenue streams to be spent in the local area.

“However, if such a process was to be considered in York, there would have to be an agreed plan between businesses and wider partners on how and where that money should be spent.

“Hoteliers, who would have to adapt their processes to collect the tax, would need assurances that it would not deter potential customers coming to the city or push them into alternative accommodation where the tax would not be applicable.”

What are politicians and the Government saying?

Among those backing a tourism tax are York Council’s Labour Leader, Coun Claire Douglas, and its economy spokesperson Coun Pete Kilbane.

Coun Douglas revealed that the authority’s budget consultation results indicated strong public support for a levy. She said: “This means it’s right we consider how York can move towards a position where it has the ability to introduce a levy.

“Our conversations will continue with hospitality businesses in the city, as we’re keen to work in partnership on proposals like this that would see more investment in York’s visitor economy.”

Coun Kilbane expressed in December that the charge was a no-brainer and the council were persistently lobbying the Government for powers after efforts to get hotels on board voluntarily stalled. He further stated that the council aimed to acquire powers to collect the charge so it could be distributed across York rather than being controlled by a new BID.

Labour York Central MP Rachael Maskell urged Prime Minister Keir Starmer in Parliament on Wednesday, January 15, to grant local authorities the power to impose charges on tourists. Ms Maskell has projected that charges of £1 or £2-a-night on stays could generate £1.7m and £3.4m-a-year respectively.

However, the prime minister responded that places could already opt to implement a levy voluntarily and the Government was focused on assisting hospitality with Business Rate relief.

A Government spokesperson said: “There are currently no plans to introduce a tourism tax in England.”

Get all the latest and breaking news in Yorkshire by signing up to our newsletter here.

This post was originally published on here