Manchester Imposes UK’s First Tourist Tax Apr/May 2023
CLH News
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towards maintaining and investing in holiday destinations - opponents say it would put people off visiting Wales.
Manchester has become the first city in the UK to introduce a tourist tax, which will cost an additional £1 per night for accommodation stays. The “Manchester Tourist Tax”, also known as the “City Visitor Charge”, is a flat rate of £1 per night per room that is charged to overnight visitors staying in hotels, hostels, and other types of accommodation in the city centre of Manchester.
David Chapman, executive director at UKHospitality Cymru, is “deeply disappointed” with the news. He said: “This tax on beds is widely opposed by the accommodation sector in Wales who see it as anti-competitive and another restriction on an industry in the midst of its recovery and rebuilding effort.
From the beginning of the month (April) every ‘hotel and short stay serviced apartments’ in the city centre with a rateable value of £75,000 or more will charge the fee.
“While the Welsh government is right that visitor levies are common around the world, what they fail to mention is that in those countries they have a significantly lower level of VAT and other taxes incurred by British hospitality. The introduction of this tourist tax simply raises the tax burden on our businesses even higher to punitive levels compared to the rest of the world, making us yet more uncompetitive compared to similar destinations,” Chapman added.
The money raised from the tax will be used to fund a range of projects that will improve the visitor experience in Manchester, such as: • Improving public transport: The money will be used to improve public transport in the city centre, such as by increasing the frequency of buses and trams.
Edinburgh is another city which is also considering the introduction a £2 nightly tourist tax, and is currently subject to approval from the Scottish parliament. Oxford, Bath and Hull have contemplated similar moves in the past but, thus far have decided against the decision.
• Improving the city’s cultural attractions: The money will be used to improve the city’s cultural attractions, such as museums and galleries. • Improving the city’s green spaces: The money will be used to improve the city’s green spaces, such as parks and gardens. 73 hotels and short stay serviced apartments located within the centre of Manchester and in parts of Salford signed up the scheme. The new charge comes as 6,000 hotel rooms are due to open in Manchester over the coming years, which is expected to attract a further one million overnight stays. Annie Brown, the first chair of ABID, said: “The goal of the Manchester Accommodation BID is simple – we need to increase overnight stays in line with that growth so that hotels and serviced apartments in the city can continue to thrive.”
“ANTI-COMPETITIVE TAX” Elsewhere in the UK, Wales is also set to introduce legislation that will enable a tourist tax. Legislation allowing local authorities to introduce a levy will be put to the Senedd within the next two years, the Welsh government has said. It has also published the findings of a public consultation on the topic. Supporters say the tax would contribute
“DAMAGING EFFECT” Five years ago, then Chancellor Philip Hammond mooted the idea of a tourist tax which proposed a £1 to £2 levy incurred by visitors staying overnight in certain UK cities, and was heavily criticised. Kate Nicholls, Chief Executive of UK Hospitality, voiced concerns in 2018 that the measure could potentially have a “damaging effect” on the hospitality sector as a whole. In the group’s letter to the Chancellor, she said: “I am writing to convey our profound opposition to such a policy and our sincere concern over the impact any additional taxation would wreak on an already-strained and overburdened sector.” Ms Nicholls suggested that the proposed levy would ‘wreak havoc’ on a sector which employs approximately one in 10 of the UK’s working population, argue that the tax could give way to a number of negative outcomes, such as reduced tourism, leading to businesses losing out on customers. “Conversely, those who come for a day trip, stay with friends or use a home-sharing service, such as Airbnb, will not contribute a penny, despite using local amenities,” she wrote.
Easter Weekend Lifts Spending Across Hospitality and Leisure New data from Barclays shows that Hospitality and Leisure businesses benefitted from a 2.7% per cent increase in the total number of sales over the Easter Bank Holiday Weekend (7-10 April) – compared to Easter 2022 – as Brits made the most of the warmer weather and enjoyed days out after months of cutbacks. The categories which saw an uplift in transaction volumes, compared to the Easter Bank Holiday weekend in 2022*, include: • Restaurants o Up 3.09 per cent
• Camping & Caravan sites: o Up 8.4 per cent • Sports centres (including football and golf): o Up 21 per cent • Fast Food o Up 0.5 per cent Marc Pettican, Head of Barclaycard Payments, said: “After a period of reduced non-essential spending, it’s encouraging to see so many Brits make the most of their Easter celebrations this year. Consumer spending surged across Hospitality and Leisure as people enjoyed the sunshine
across much of the UK this weekend and headed out to restaurants, camping and caravan sites, and sport centres. “While our research shows that half of consumers are consciously trying to cut back on discretionary spending overall, this uplift in transactions demonstrates that many Brits are still keen to spend their time off outdoors, socialising and eating out with friends and family. This will be welcome news for UK businesses amid the rising cost of living, and as they look forward to another boost in trade over the Coronation weekend and upcoming May bank holidays.”
