Tourism Taxes are controversial. They are generally too low to deter visitors but they do enable local authorities to raise money to fund the management of tourism, to repair damage to lawns and pay for the removal of litter.
If one of the aspitations of Responsbel Touruism is that tourists shoud be treated as temporary residents then it is not unreasonable that overnight tourists and day visitors shoud contribute to the maintenance of the public realm which they are visiting and using.
Tourism taxes are generally levied through accommodation providers and occasionally through tour companies.
It is increasingly recognised that the tourism industry “freeloads”on the public realm in the places it takes visitors too. As Sir Colin Marshall, the then chair of British Airways said in launching the Tourism for Tomorrow Awards in 1994 the travel and tourism industry is: “…essentially the renting out for short-term lets of other people’s environments, whether this is a coastline, a city, a mountain range, or a rainforest.” The problem is that the rent goes to the businesses, the rent is privatised the costs are borne by the public purse.
The public realm is always common in the sense that they are open-access or common-pool resources, even though parts are sometimes privatised for tourism use. Tourism makes extensive use of common pool resources, public and merit priced* spaces, streets, public squares, parks, museums and galleries and yet it pays no user fees for that public space. As Galbraith pointed out in The Affluent Society, first published in 1958, in communities where public services fail to “keep abreast of private consumption”, an “atmosphere of private opulence and public squalor results…” Freeloading contributes to the destruction of public space and the environment.
Whenever price or tax is suggested as a way of addressing demand or the costs imposed on destinations by tourism there are accusations of elitism. However, tourist taxes are an example of the application of the polluter pays principle and price is widely used by business to manage demand, in a market economy supply and demand rules.
In Scotland, Edinburgh City Council has plans to introduce a transient visitor levy (TVL) proposals include a £2-per-night charge added to the price of any room for the first week of a stay. The levy would apply to “all paid accommodation” across Edinburgh, including hotels, B&Bs, short-term lets and hostels. Councillors in Edinburgh backed the plans by 43 votes to 15. It is estimated the tax could raise between £11.6m and £14.6m per year in Edinburgh. The council’s decision was welcomed by Edinburgh Chamber of Commerce. Its CEO, said: “After consulting our members, we found broad support for the principle of a transient visitor levy, support which increases further if funds were ring-fenced and re-invested entirely in the city’s infrastructure.”
Edinburgh does not yet have the power to introduce a levy, but the national government has committed to consult “on the principles of a locally determined tourist tax, prior to introducing legislation to permit local authorities to introduce a transient visitor levy”. more
The Scottish Tourism Alliance has made the case against TVL:
- It damages international competitiveness – UL already ranked 135 out of 136 on price competitiveness.
- Edinburgh is one of the few European cities in decline. Glasgow figures are showing the same trend. There is a misconception of a buoyant industry.
- In the UK prices have to be displayed including all taxes.
- Tourism will be subject VAT and TVL, raising the cost of doing business, and APD when they leave.
- Research suggests that for each 1% increase in cost relative to other destinations reduces tourism by 1%
- Research by TTRI, (Study of Tourism Demand in
UK(2007)) shows that a 1% increase in UK prices or relative exchange rates would lead to a 0.61% fall in tourism expenditure.
- Lake Constance imposing a visitor “resort tax” of €2.50 and issues a visitor card which offers discounts on attractions and services in Constance and the surrounding area and free local transport by bus
- Venice is introducing in 2019 a visitor tax of between €2.50 and €10.00 per day – this will be paid by day trippers and cruise passengers. more
- Since January 2016 visitors to the Portuguese capital of Lisbon have to pay a Municipal Tourist Tax of €1 (89p) per person per night. Children under 13 are exempt from the overnight tax and it only applies to the first seven days of your stay
- Balearic Islands: Sustainable Tourist Tax, applies to holiday accommodation. Those staying in luxury hotels pay €4 a per person, per day (£3.50 at the time of writing), €3 (£2.62) for mid-range hotels, €2 (£1.75) for apartments and cruise ship visitors – even if you don’t stay on the islands – and €1 (87p) for campers and hostels. Prices are halved if you’re travelling from November to May and the tax drops by 50% after your ninth night on the island.
- France: ‘Taxe de Sejour’, charged per person, per night, varies according to the quality and standard of the accommodation. Paris charges an extra 10% on the tax, raising the tax to €0.22 (19p) and €4.40 (£3.84). Children under 18 are exempt from the tax.
The website Love Money has a longer list.
*Merit goods are those that a society judges should be available on the basis of need or in the public interest made freely available and which are priced, for social reasons, below cost or market value.