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EventsTourist Tax - The next big industry trend?
Is a tourist tax the next big trend in the UK hotel industry? As Manchester becomes the first UK city to introduce a nightly charge to visitors of serviced apartments, hotels and guesthouses, we're answering some of your FAQs and examining the pros and cons of tourist taxes.
What is a tourist tax?
A tourist tax is a small fee charged to overnight visitors. It is levied indirectly through accommodation providers, such as hotels and holiday companies. The idea is to create additional funds for high-volume tourist areas, combatting some of the ill effects of over-tourism and creating a better experience for residents and visitors.
How much is the tourist tax in Manchester?
On 1st April 2023, Manchester introduced a new 'City Visitor Charge' of £1 per room per night. This charge will apply to guests of hotels and short-stay serviced apartments in the Manchester Accommodation Business Improvement District (ABID). This area covers 73 properties with an annual rent value of over £75,000. However, it will also automatically apply to new properties in the zone. Over the coming years, the city expects to add 6,000 hotel rooms, predicted to generate an extra million overnight stays.
By increasing the cost of apartment and hotel stays in Manchester, the city hopes to rake in £3 million annually to invest in cultural and tourism initiatives like events and festivals. The city will also use the money to improve street cleanliness and enhance the Manchester tourist experience with new activities for people to enjoy.
While there have been mixed reactions to the tourist tax, 80% of hoteliers in Manchester voted in favour of it in the 2022 referendum, suggesting that the majority do not think it will negatively impact tourism in the area.
Where else in Europe do you have to pay a tourist tax?
If you've holidayed in Europe over the past few years, you'll have likely paid a tourist tax at some point. Many popular tourist destinations charge additional fees to help counteract heavy tourism's damaging impact on residents, including noise pollution, inflated rent and prices in restaurants and shops, and pressure on public services.
Barcelona is one example, where visitors must pay a regional tourist tax and a city-wide surcharge, which varies depending on the type of visitor accommodation.
Spain's Balearic Islands, including Mallorca, Menorca, Ibiza and Formentera, already charge a tourist tax of up to 4 euros per night. And tourist hotspot Valencia also recently announced the introduction of a tourist tax for visitors staying in hotels, hostels, apartments and campsites in the region, which will come into effect in December 2023.
If you're visiting Venice in Italy, you can expect to pay up to 5 euros extra per night, depending on the rating of your accommodation. There's also talk of extending fees up to 10 euros for day-trippers.
Will other UK hotels charge tourist tax?
Manchester is the first UK city to charge a City Visitor Charge, but we think it'll only be a short time before other tourist hotspots follow suit. The Welsh government is considering introducing a visitor charge for overnight stays in the country, and The City of Edinburgh Council has just approved plans to introduce a £2 tourist tax in the Scottish capital from 1st November.
Previously, Bath, Hull and Oxford considered charging tourists to visit their cities, but nothing transpired.
Pros and cons of tourist taxes
Tourist taxes are controversial as there is disagreement over whether they positively or negatively affect the tourism industry.
On the one hand, tourist taxes help reflect the true cost of tourism, which can include:
- Clearing up litter
- Providing car parks
- Keeping beaches clean
- Building public footpaths
Tourist taxes can also be viewed positively as a way of giving back to the local area, easing the pressure on stretched council budgets, boosting local services, and even allowing for council tax cuts. After all, it shouldn't fall on locals to pay for the extra resources required during tourist season.
Asking visitors to make a financial contribution that is invested back into the local tourist industry can also help support the accommodation sector, protect and create jobs and benefit a city's economy. It has a minimal financial impact on visitors but substantial financial benefits to the local area.
Conversely, charging people extra to stay in a hotel or apartment could drive tourists away and make people spend less in local shops and restaurants. Increasing the cost of a holiday (even by just a few pounds) could also be considered unwise in the current cost-of-living crisis.
Other arguments against tourist taxes are that they need to address the core issues of sustainable tourism. Raising taxes won't fix tourism density issues without implementing effective visitor management and responsible planning.
UK tourist tax: a need for transparency
At Plans Change, we can see both sides of the argument. But ultimately, if travellers are willing to pay an extra couple of Euros to visit their favourite European cities, we can't see why they wouldn't be willing to do the same to stay in some of the vibrant cities and beautiful heritage towns in the UK.
“For tourist taxes to work, there needs to be transparency. This funding mustn’t be swallowed up into wider local authority budgets. Understandably, consumers will want to know precisely how a tourist tax is used and see it being spent on services and events that improve the visitor experience and compensate those who call popular tourist destinations home” says Sam Narula, Co-Founder and Director of Plans Change.
What do you think about tourist tax in the UK? Would it put you off booking a hotel in a destination where you had to pay this on top of your booking? Let us know your thoughts on social media. Find us on:
