| 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 ?