Mayors will have the power to implement overnight stays tax
A new tourist tax, which can be implemented as an overnight visitor levy on tourists by Mayors in England, could have a major impact on holiday lets and tourism investors.
The new scheme, announced by the government on Thursday after a consultation last year, is similar to schemes already running in Scotland and Europe and one that will come into effect in Wales in April next year, allows local leaders to decide how the money raised should be spent as well as whether to introduce the charge in the first place.
Richard Bond, owner of Finest Retreats, the UK’s largest independently owned holiday let management company, called the move short-sighted. “This is another blow to the UK’s tourism industry,” he said.
“Disguised as empowering local government, it’s essentially an anti-growth policy. For areas that introduce the visitor levy, fewer visitors could mean layoffs, or at the very least, fewer seasonal hires, especially considering these businesses are already absorbing higher National Insurance and minimum wages costs, none of which were in the manifesto.
Accommodation providers could close
And he said that will have a big impact on accommodation providers. “We know that as soon as prices rise, guests will look elsewhere for a better deal. That forces accommodation providers in any affected areas into either absorbing the cost or resigning themselves to reduced occupancy levels. These businesses are already stretched and this additional tax will force accommodation providers with smaller profit margins to close permanently.”
Ultimately, however, he said it will be the local mayors who decide the fate of accommodation providers in their areas. “By handing this decision to mayors rather than a government mandate, local leaders have a choice. The mayors who choose to stay levy-free are the ones who truly back local businesses and will be the ones welcoming visitors who refuse to pay the levy in neighbouring areas.”
