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Hotel owners criticise new powers for English tourist taxes

Hotel owners across England are criticising the government's announcement that mayors and local leaders will be able to introduce a tourist tax on overnight stays.

  • The government has announced that metro mayors and leaders of foundation strategic authorities in England will be able to raise a tourist tax.
  • Hotel owners, from large chains to small businesses, have criticised the proposed tax, citing existing struggles within the industry.
  • While Scotland and Wales have already introduced laws allowing councils to implement a tourist tax, England only followed suit this year.

The government's announcement that mayors and local leaders in England will be able to introduce a tourist tax, also known as a visitor levy, on overnight stays has drawn criticism from hotel owners. Hoteliers, ranging from large chains to small independent businesses, have voiced concerns about the additional pressure on an industry they describe as already struggling.

Serena von der Heyde, who runs the Georgian House Hotel in London, stated that her business has faced its hardest period in terms of taxation and limited growth opportunities. She noted that her hotel has experienced several months this year of not meeting its budget, which she described as unusual for London, and is seeing a drop in European visitors.

Ms von der Heyde, whose 60-room hotel employs 50 staff, has recently combined staff roles, reduced budget, and scaled back output for guests. She highlighted that the UK has a 20 per cent VAT rate for hotels and believes an additional five per cent tourist tax would be like “throwing a drowning man a brick.”

Concerns have also been raised by larger hotel chains. Whitbread, owner of Premier Inn, stated the tax would be “hugely damaging for hospitality,” while Butlin’s chief executive, Jon Hendry Pickup, suggested that a lack of a national upper limit could “burden” resorts and make family holidays less affordable. Hilton described the move as a “catastrophic blow” that would “stifle” hiring.

Eddie Nelder, who owns Choice Hotels with three properties in Blackpool, believes a tourist tax is better suited to large cities than seaside resorts. He argued that Blackpool, a working-class resort, competes with destinations like Benidorm, and the tax would make it harder to compete. Mr Nelder, who employs over 350 people, has cut approximately 38 staff to save money, noting that raising room prices deters visitors.

It may be years before the first English statutory tourist tax is implemented, as a bill needs to be introduced, local spending plans formalised, and consultations held with residents and local businesses. Edinburgh is currently the only area in Britain with a statutory tourist tax, which adds a five per cent fee to overnight stays.

What this means for you: If a tourist tax is introduced in your area, you may face an additional charge on overnight stays in hotels.

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