By Matthew Hutton, accounting senior manager, Armstrong Watson LLP
Tourist taxes have become commonplace in European cities, and now that the UK has its first tourist tax city, it could pave the way for other areas of the country to follow suit.
In April, Manchester became the first UK city to charge visitors for overnight stays.
The levy, known as the City Visitor Charge, is a £1 fee per room, per night, added to the final accommodation bill by 73 hotels and serviced apartments that form the Manchester Accommodation Business Improvement District (BID).
It is expected to generate £3m per year, which will be used to improve the visitor economy and support its growth through a range of projects and initiatives.
Could the Lake District be next?
Edinburgh could follow Manchester in introducing the levy on overnight accommodation after local officials considered plans for a £2 nightly charge last November, and other cities and tourism hotspots such as the Lake District, are at the initial consultation stages.
The Northern Powerhouse Partnership has suggested that a similar ‘tax’ in the Lake District could raise £5.5m to support culture, protect the environment and improve the visitor experience.
What would it mean for Cumbrian businesses?
The many incredible hospitality and tourism businesses I support within the Lake District work very hard to provide guests with the best experiences to complement the surrounding scenery, however, with the Lake District National Park welcoming 15.8 million visitors a year, the sheer volume of footfall in the area can take its toll on the landscape.
The infrastructure of our small towns and villages is often pushed to its limits due to the number of people visiting, with insufficient parking and narrow pavements, among other issues.
It could be argued that if the funds generated by a tourism tax were reinvested back into improvements benefitting the area and the sector, it could be an extremely useful tool to address some of these issues.
On the other hand, some suggest that an additional cost burden during a cost of living crisis may drive those very same tourists – who generated a total of £1.35 billion for the area in 2021 – away.
Whether the Lake District will introduce a tourist tax of its own remains to be seen and only time will tell if such a scheme would bring about benefits or more challenges for businesses in the area.
If your business is experiencing challenges and you would like advice on how to mitigate the impact, please get in touch. Call 0808 144 5575 or email help@armstrongwatson.co.uk
