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| Hospitality Today | Feb / March 2017
London Mayor threatens a tourist tax
The hospitality industry is gearing up to re-fight a 10 year old‘ bed Tax’ battle
In March 2007 the‘ Lyons Inquiry’ recommended introducing a power for local authorities to levy a tourism tax( or“ bed tax”). The Tourism Alliance, British Hospitality Association( BHA), B & B Association and others vehemently protested about this threat to UK tourism. The then battle was won- Local Government Minister Phil Woolas pronounced:“ The Government does not intend to introduce a tourism tax.”
Last month the Mayor of London, Sadiq Khan, announced that he will consider introducing a‘ tourism levy’ in London. This follows similar moves in Edinburgh and elsewhere.
The UK already has virtually the highest tourism taxes in the EU, with VAT at 20 % compared to 5 % in many countries, the highest Air Passenger Duty in the world( which impacts inbound visitors), and amongst the world’ s highest rates of duty on fuel and alcohol. At the same time, many tourism and hospitality businesses are being hit this year with massive hikes in Business Rates.
The World Economic Forum ranks the UK at 140th out of 141 countries in terms of tourism price competitiveness.
And there is already some evidence that overseas tourists are perceiving Brexit Britain as less welcoming. They have a choice where to go and spend their money.
The industry is telling Government that this is not the moment to pile yet another new tax on those who come here to spend their money and help the UK’ s balance of payments.
And the Tourism Alliance points out that‘ Bed Taxes’ don’ t work: in New York, a combined Tourism and sales Tax rate of 21.25 % resulted in the convention industry halving in size within five years. They are unfairly targeted too: a bed tax on hotels and B & Bs would only target some 3.8 % of the people visiting a destination, who would be penalised whilst day trippers, campers, selfcaterers, Airbnb users and others would be subsidised at the expense of hotels and B & Bs.
And the 2015 Day Visitor Survey found that an overnight visitor spends £ 66 per day locally, whereas a day tripper spends just £ 35. So, the Tourism Alliance argues, why discourage those who will get our economy moving?