Tourism taxes around the world: how high do they go?
“Welcome to Manchester – please pay £1 for the privilege of being here.”
From tomorrow (1 April), that is what awaits visitors staying in hotels in the city, as Manchester become the first location in the UK to levy a tourist tax.
Guests in city-centre hotels or apartments will be charged £1 per night, per room, as part of a new scheme that officials hope will raise £3m per year.
The money is being collected by an organisation called the Manchester Accommodation Business Improvement District (ABID). And it will be spent “to improve the visitor experience and support the growth of the visitor economy across the city over the next five years”.
It mirrors similar fees introduced in tourist destinations such as Amsterdam, Barcelona and Rome. The idea looks like catching on, with Edinburgh and locations in Wales following soon. But could these extras annoy tourists and persuade them to go elsewhere?
How will this charge be levied – and what exactly happens to the money?
It’s a “statutory charge” so, like VAT, you can’t avoid it. Guests will find it added to the final bill, though it may be inflated by adding VAT to make it £1.20. Specifically, that means a benefit for future visitors of “improving guest welcome and street cleanliness”. But the ABID organisation also says it will be used to fund marketing campaigns and for “securing large-scale events, conferences, and festivals in low-season months”.
In other words, tourists today will help pay to attract future visitors.
Will the extra charge put people off?
If a city-centre hotel room typically costs £50 or £100, then £1 (or £1.20) is a trifling 1 or 2 per cent. People are not going to think: “How outrageous – I’ll go to Liverpool or Leeds instead.” The proponents say it’s a neat and light-touch way to boost Manchester’s place on the international stage still further.
The tourism offering is constantly expanding – with the revamped Manchester Museum opening earlier this year, and a major new cultural space, Factory International, due to open in the heart of the city in June. And there are a couple of football clubs that seem to attract visitors.
But guests in the UK already pay 20 per cent in VAT, which is much higher than many other countries. And these fees have a habit of increasing fairly rapidly. An analogy in travel, I’d say, is the introduction of fees for checked baggage. They started with Flybe in the UK in 2006, with a charge of just £2 per bag. As passengers are painfully aware, that can these days be £50 or more.
But there are similar models elsewhere …
Yes, with Italy probably leading the way with the imposta di soggiorno. In Venice it is designed “to finance tourism, the maintenance of cultural heritage sites and the environment as well as public services”. It is basically about €1 per star per person per night – so €1 for a one-star to €5 for a five-star hotel – in high season, which is the entire year apart from the month of January. Rome, Milan and Florence have similar scales.
Venice is also planning a daytripper fee. This is because visitors who don’t stay overnight often contribute very little to the city’s economy. Critics say it is turning Venice into an ever-closer Renaissance version of Disneyland.
Elsewhere, tourism taxes and national park fees can go straight to conservation efforts. In the Galapagos islands, the admission fee is US$100, which goes to preserve the unique environment as well as supporting the community infrastructure.
Could the tax ever be used as a deterrent?
Yes, and in Amsterdam, the city government is actively seeking to rid itself of “binge-drinking stag and hen parties from England”.
One weapon is to increase the tourist tax – currently 7 per cent plus a flat €3 per person per night. On a double room costing €100, that totals €16. Much as I believe in keeping travel as democratically affordable as possible, I imagine that bumping up the flat-rate may be the path the Dutch capital chooses in its pursuit of better-behaved tourists.
Amsterdam also has a daytripper tax of €8 per person for passengers on cruise ships visiting the city.
In the Himalayan kingdom of Bhutan, meanwhile, every visitor pays US$200 per person, per night as a “Sustainable Development Fee”. The cash goes into government coffers, funding free healthcare and education. And for the visitor, it means paying £1 every nine minutes – rather more than the Manchester fee.
Other UK locations are considering it – will £1 a night become common everywhere?
Edinburgh is looking at £2 per night, Wales is about to pass the legislation to allow it.
All eyes will be on Manchester to see how the new scheme works out. And, if it’s judged a success, visitor fees could become the norm in places that are on the tourism circuit – local authorities may see it as free money, that allows them to cover costs that would otherwise come out of council tax.
But I think guests staying in a budget hotel on the fringes of my home town, Crawley, might baulk at the idea of paying a tourist tax.