Tourism tax could 'devastate' Blackpool hotels

But hoteliers leaders in the resort have given a firm 'no' to the idea - which they say would just add another burden to small businesses.

The Local Government Association (LGA), which acts as a national voice for local authorities, says introducing a hotel tax similar to those imposed in places like Venice and Barcelona could raise hundreds of thousands of pounds for cash-strapped councils.

It wants the government to give town halls the power to raise their own tourism levy if they wish to do so.

But the move has been met with alarm in Blackpool with some hoteliers warning it could harm many of the smaller b&bs.

Claire Smith, president of hoteliers group StayBlackpool, warned the accommodation sector is already "overburdened" with tax and legislation, including a higher level of VAT than Europe.

She said: "It is a tax that StayBlackpool would strongly oppose for many reasons.

"The main one is we don’t feel confident in the government being able to apply this tax to all tourism accommodation businesses equally as there is an absence of a comprehensive register of the supply of accommodation.

"The way such platforms as AirBnB work enables many of their providers to literally avoid the burdens the rest of us have like tax, insurance, compliance and legislative costs.

"It would be the usual story of the 'good' guys having to pay and support the scheme whilst others got away with it."

She said a tourism tax might work in London and other European capitals.

But Ms Smith added: "The accommodation sector is already overburdened with tax and legislation and profit margins for the small independent accommodation provider are just too small and already over stretched.

"The visitor economy sector in seaside towns like Blackpool needs help and support not further pressure being added.

"There may be existing bed taxes in parts of Europe but they generally have a much lower VAT percentage than we do, giving them a big financial advantage even after the bed tax.

"Therefore, if you add a bed tax on top of our UK VAT at 20 per cent this makes us an even more expensive country to visit."

A survey by the LGA found 53 per cent of respondents thought their council should be able to charge tourists a small fee to help fund local services that support tourism in their area.

Coun Gerald Vernon-Jackson, chairman of the LGA’s Culture, Tourism and Sport Board, said: “Giving councils the ability to introduce a local tourism levy means they could reinvest some of the tax income generated by this tourism into their local area into the services that are attracting visitors."

Some European cities charge hotel guests a few euros a night in tax which is added onto their hotel bill.

Ian White, who runs The Chorlton Hotel on Hull Road and is also a director of StayBlackpool, warned while a tourism tax might work if applied to large hotels, it could devastate smaller businesses.

He said: "There may be a case for the big hotels, and holiday complexes, but where do you draw the line?

"To extend the tax across the whole sector I believe would devastate Blackpool, driving more of the small b&bs, guest houses, and apartments out of business."

A tourism tax was previously considered by the government in 2007 but rejected.

At the time hoteliers in Blackpool warned it would add 10 per cent to the cost of a holiday – around £100 on the average cost of a week in Blackpool – and drive trade away.

Tony Banks, who operates five hotels in the resort as part of his Blackpool Promotions Group, said some hoteliers were already struggling to make enough money to reinvest in their properties and another tax would only make this more difficult.

He said: "For Blackpool, a hotel bedroom tax is a definite no. However I do see the logic in major conurbations where they are charging extortionate rates of hundreds of pounds a night for one room.

"If we want to close down all the small hotels in Blackpool, then introduce the tax.

"But if we want to see Blackpool boom, which we all do, we should be saying we want to do all we can to help hoteliers reinvest in their properties."

Blackpool Council has had to make budget cuts of around £150m since 2011 with around three quarters of its spending now going on social care, but still funds attractions including £1.7m annually towards the Illuminations and the events calender including the Blackpool Air Show.

No-one from the council was available to comment on the suggestion of a tourism tax.

LGA-commissioned independent research found a pound-per-night levy applied in a local area in England could raise between £238,000 and more than £7m a year depending on the area.

In its submission to the forthcoming Budget, the LGA sets out how the Government could give councils more control over their finances and greater ability to grow their own economies.

As part of this, it is calling on the Government to use its Tourism Sector Deal prospectus to invite local areas keen to become a tourist zone to make the case for piloting a local tourism levy.

Coun Vernon-Jackson added: "Councils are best-placed to boost visitor economies and are trying to find innovative ways of supporting and boosting culture and heritage.

“Significant funding and demand pressures are hampering these efforts.

"The time has come for a national debate about what a tourism levy could look like, how it could be successfully introduced across the country and how money raised could be reinvested locally to help councils create places where people want to live, work and visit.”

Examples of the tourism tax

Venice city tax ranges from 3.50 euros per person per night for three star hotels to five euros per person per night for five star hotels.

Barcelona charged up to 2.25 euros per person a day in 2019 while Amsterdam charges three euros per person per night in hotels.