Proposal for ‘tourism tax’ in York sparks debate as idea put forward

A proposal for a visitor levy, or tourism tax, in York has sparked debate, with supporters claiming it could generate millions for the city and critics warning it could be detrimental. The idea has been put forward by politicians as a potential way to bolster York’s economy during tough financial times.

A consultation on York Council’s Budget proposals revealed over 80% of respondents would back such a charge. However, concerns have been raised by hotels, guest houses and York’s hospitality industry body about how the funds would be used and the possible deterrent effect on tourists.

At present, York Council lacks the authority to impose such a tax, and the Government has stated it has no plans to give local authorities this power. This follows the introduction of a 5% tourism tax on accommodation costs in Edinburgh last year, after the Scottish Government decided to allow councils to levy charges.

The initiation of this levy, along with one introduced in Manchester through a legal loophole, and attempts to implement it elsewhere, have given momentum to efforts to introduce one in York. 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 instance, in Barcelona, this amounts to €4 (£3.36) per night, reports Yorkshire Live. The city of York has always been a popular destination for Teessiders heading for days out or short stays.

The roll-out of tourism taxes across Europe has triggered discussions for similar charges in the UK, with Manchester pioneering the move by introducing a £1-a-night charge this year. Despite local authorities not having the authority to impose such taxes directly, Manchester circumvented this through legal workarounds by setting up a Business Improvement District (BID) where hotels and other lodgings collect the fee.

However, efforts to replicate this elsewhere have faced pushback.

York’s hospitality sector has offered varied reactions to the idea of a tourism tax. Andy Barnsdale, general manager of The Milner close to York Station, cautioned that such a charge could repel tourists from the city.

He remarked: “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.”

Paul Helmsley from York’s Monk Bridge House guest house showed a willingness to consider the proposal, with certain conditions. He remarked: “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.”

However, he added, “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.”

Another concerned guest house owner, preferring anonymity, questioned the potential bureaucracy involved. They expressed doubt, saying: “Does this make us responsible if the guests do not pay? Do we get penalised if guests do not pay? ” The owner further highlighted the lack of clear guidance, commenting: “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 spokesperson for the Hospitality Association York also contributed to the conversation, noting that discussions about the proposals had been happening for around a year without real progress. They communicated that up to now, no scheme involving voluntary contributions collected by businesses had been proposed to them.

A spokesperson has voiced concerns about the potential impact of additional costs on York’s appeal as a tourist destination: “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.”

They added, “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, Executive Director of York BID, highlighted that businesses in York are monitoring Manchester’s approach to a tourism charge, noting: “The obvious benefit is that it can introduce new revenue streams to be spent in the local area.”

He also mentioned, “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.”

Lowson pointed out the need for hoteliers to receive assurances that the tax wouldn’t discourage visitors or drive them to alternative accommodations exempt from the tax.

On the political front, York Council’s Labour Leader, Coun Claire Douglas, and its economy spokesperson Coun Pete Kilbane are among those advocating for a tourism tax.

Coun Douglas has disclosed that public support from the authority’s budget consultation is strong for a levy, noting: “This means it’s right we consider how York can move towards a position where it has the ability to introduce a levy.”

She elaborated on discussions with local businesses, pointing out, “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.”

In December, Coun Kilbane labeled the charge as a no-brainer, revealing that the council was consistently lobbying for governmental powers after failing to secure voluntary support from hotels. He also mentioned the council’s goal to gain control over the collection of the charge, ensuring it benefits York instead of being managed by a new Business Improvement District (BID).

On Wednesday, January 15, Labour MP for York Central Rachael Maskell appealed to Prime Minister Keir Starmer in Parliament, urging for local authorities to be given the power to impose tourist charges. Ms Maskell suggested that a nightly charge of £1 or £2 could potentially raise £1.7m and £3.4m annually respectively.

Yet, the prime minister indicated that areas already have the choice to adopt a levy voluntarily, with the Government prioritising Business Rate relief to aid the hospitality sector.

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

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