Hospitality ‘absolutely against’ possible tourist tax

Hospitality businesses are “absolutely against” the notion of a tax on holidays being imposed with fears that the increased cost could deal a blow to the county’ s economy.

he exact parameters of a tourist tax have not been confirmed, but the topic has been increasingly discussed in recent weeks, and firms who work in the hospitality industry in Devon have expressed vociferous opposition to it.
Chancellor Rachel Reeves has talked predominantly about the power to impose a tourist levy for regional mayors, and while Devon does not have a mayor, it does have a combined county authority, some of whose powers and responsibilities partly echo a mayoralty.
Plus, the direction of intended travel by Westminster is for Devon to have a mayor.
Jason Garside, the boss behind the firm that owns a trio of Torquay hotels, including the Victoria and Carlton hotels, barely takes a beat when asked his thoughts about the prospect of a visitor levy.
“I am absolutely against a tourist tax,” he said.
“I appreciate local authorities may be under-funded but our industry is already highly taxed. At a time when people have less money in their pockets due to the cost of living, anything that would add to our inflation would be unwelcome right now because we are living in a time of such uncertainty.”
Mr Garside acknowledged that the principle of the tourism sector contributing to the local economy was “absolutely key to a thriving seaside town”.
“But I would argue our £7 million pay roll already does that, with our staff spending money in the local area and with businesses in our local supply chains,” he added.
“While the pressures are immense of running a hospitality business, anything that adds to that would be unwelcome.”
The issue has been discussed by the English Riviera Business Improvement District, or BID, which Mr Garside sits on, and he said “lots of members are opposed to it for similar reasons”.
Polly Cochrane, a director at Sweetcombe Cottage Holidays, based in Sidmouth, feared a potential lack of understanding by hospitality and tourism businesses over the issue, which could make lobbying against it or shaping its implementation more difficult.
“It needs to be thought through properly, and if it isn’t done correctly and the money isn’t ringfenced, I don’t think that’s fair,” she said.
Ms Cochrane feared that based on the mooted £2 per person, per night rate, that could add £100 to a fairly common booking.
“If that’s being added to every holiday, that’s a huge uplift for us,” she said. “To add it on to every booking would be a lot and what it could mean is that people who do come don’t want to eat out because of accommodation costs, and so they might not spend in local restaurants and shops.”
She thought such a tax would have a “detrimental effect” on businesses like hers, which she described as a longstanding family business.
“We’re not people trying to get rich quick,” she said. “We’re a longstanding family business and we’re working with customers that my mum and grandmother took on and our guests have been coming here for years.”
In efforts to defend the prospect of a tourist tax, some proponents point out that Brits pay such levies when they visit some European nations.
But Ms Cochrane noted that the Professional Association of Self-Caterers (PASC), whose work she supports, routinely pointed out that VAT in the UK is more than the equivalent sales tax and a tourist tax put together in many nations on the continent.
In fact, only the Netherlands and Denmark have higher rates of VAT than the UK, PASC analysis suggests.
Elsewhere in Devon, there is significant unease about the prospect of extra burdens on already challenged hospitality businesses.
“I feel for each and every one of the South Ham’s business owners, who work tirelessly each year to create a positive visitor experience,” said Sam Dennis, the chair of South Hams Chamber.
“In the past 12 months, they have been hit with government-imposed increases in national insurance and business rates, council-imposed increases in parking fees, and now the possible introduction of a tourist tax.
“People will simply stop coming and will choose to spend their hard-earned money elsewhere. Businesses will close, jobs will be lost, and our fragile rural, coastal, economy will fall apart.”
Ms Dennis added that politicians had to “stop taking our visitor economy for granted” and to try and support the often small, family-run businesses that “ underpin our seaside towns and rural communities”.
Devon County Council leader Councillor Julian Brazil (Liberal Democrat, Kingsbridge), supports the notion of a tourist tax, but only under certain parameters.
“I’d support it as long as the proceeds were reinvested in tourism,” he said.
“And I mean tourism in the broadest sense, such as investing in public toilets and extra rubbish collections, the things that get much heavier usage in the tourist season.
“When you go abroad, they’re out every evening making it look lovely, and that’s what we have got to invest in, but if the government simply wants it to boost their coffers, then I’d be opposed to it.”
He also stated that he would be opposed to any proceeds being used to fund mayors, or so-called strategic authorities.
“I would go to the barricades on that,” he said. “Mayors might not reinvest it in tourism, and that wouldn’t be good.”
One of the most vocal MPs on the issue has arguably been the shadow chancellor, Conservative member for Central Devon, Mel Stride.
He has taken to Facebook to urge Rachel Reeves to “axe the tax” and to take her “hands off our holidays”.
The government paper on the issue noted tourism directly accounted for an estimated £58 billion (2.4 per cent) of the UK’s economic output in 2023, contributing to a total output of £127 billion (5.2 per cent) across related industries.
Tourism was estimated to directly account for 1.2 million UK jobs in 2023 (3.9 per cent of all workers), and 3.9 million jobs across all tourism-related activities (12.7 per cent of all workers).
A government consultation on the idea of a visitor levy as a new mayoral power ended in February, and the government said it is currently analysing the feedback on how it should be implemented, which types of property should be included and excluded, and how revenue could be collected.
Devon’s tourism businesses will be hoping whatever is decided doesn’t happen in the county.