'Tourist tax risks turning visitors away from York'

It is a proposal which its backers claim could raise millions in extra funding from York's tourism industry.

Politicians have touted a visitor levy, also dubbed a "tourist tax", as an untapped source of income to reinvest in York's economy at a time when public money is tight.

They point to a consultation on City of York Council's Budget proposals where more than 80% of residents surveyed said they would back a charge in principle.

But hotels, guesthouses and York's hospitality industry body said they had concerns over how the money would be spent, and fear it could put visitors off.

The council currently has no powers to implement a compulsory tax and the government told the Local Democracy Reporting Service (LDRS) it had no plans to give local authorities the ability to introduce them.

However, in Manchester a legal workaround was used to launch a levy and there have been attempts to introduce them in other tourist hotspots.

The idea for a tourist tax is based on charges which have been introduced in popular holiday destinations such as Barcelona, Porto and Prague.

Visitors are charged an additional fee on top of their hotel bills.

Their introduction on the Continent has prompted calls for similar levies in the UK and Manchester became the first city in the country to introduce a City Visitor Charge in 2023, set at £1 a night.

A Business Improvement District (BID) for hotels and other accommodation providers was launched which collects the levy, but efforts to bring them in elsewhere have faced opposition.

Andy Barnsdale, general manager of The Milner near York Station, said a fee could deter people from visiting York.

"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, of York's Monk Bridge House guesthouse, said he was open to the idea but he would want to see how the revenue would be spent.

"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.

"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."

A spokesperson for industry body Hospitality Association York said conversations about proposals had been ongoing for about a year but no progress had been made.

They added that no plans had been presented to them for a scheme which would see businesses voluntarily collect money from customers.

The spokesperson said: "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."

York BID executive director Andrew Lowson said businesses in York and elsewhere were watching Manchester closely to better understand the process of setting a scheme up.

Mr Lowson said: "The obvious benefit is that it can introduce new revenue streams to be spent in the local area.

"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.

"Hoteliers, who would have to adapt their processes to collect the tax, would need assurances that it would not deter potential customers coming to the city or push them into alternative accommodation where the tax would not be applicable."

The council's Labour leader, Claire Douglas and its economy spokesperson, Pete Kilbane, are among those who have backed a tourism tax.

Douglas said the authority's Budget consultation results showed there was strong support for a levy amongst the public.

She said: "This means it's right we consider how York can move towards a position where it has the ability to introduce a levy.

"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."

Labour York Central MP Rachael Maskell called on prime minister Sir Keir Starmer to give local authorities the power to levy charges on tourists in Parliament on Wednesday.

Maskell has estimated that charges of £1 or £2 a night on stays could raise £1.7m and £3.4m a year respectively.

The government has said that cities could choose to implement a voluntary levy and that support for hospitality businesses would come from rates relief.

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