A TOURISM tax being considered for one of Britain’s most popular destinations would have a “catastrophic” effect on the visitor economy, leading hoteliers have warned.
Charges of up to £1 a night could be introduced for each visitor to York in an attempt to create a new revenue stream for the city council, which is battling to make £19.7m in cuts over the next two financial years.
The plans have been condemned by hoteliers in the city amid fears that tourists could instead opt to head to rival destinations, such as London, Edinburgh, Bath or Chester.
The chairman of the York Hoteliers’ Association, Lionel Chatard, warned the proposed tourism tax would put off many visitors who have had to become increasingly frugal amid the economic slump.
He claimed many budget hotels and independent bed and breakfasts would be unable to compete effectively as their margins would be undermined by lost custom, and could lead to their closure.
The York Hoteliers’ Association brings together managers and owners to work with the city’s tourism organisation, Visit York, to develop the hospitality industry.
Mr Chatard, who has managed the luxury Middlethorpe Hall in Bishopthorpe for eight years, said: “It is shocking to think that up to £2 a night could be added to the price of a double room, which will have a catastrophic effect on the city’s tourist trade.
“It is a huge risk if the plans are pursued, because money is tight for so many people in the current economic climate.
“We all know how important tourism is to York, and while this would provide a new source of income through the tourism tax, this is of no use if the visitor economy is eroded.”
Mr Chatard revealed he is organising an emergency meeting with other hoteliers to discuss the plans, which have been drawn up under an action plan over fears of a widening gulf of poverty in the city.
The York Fairness Commission is an independent body set up by the council and sponsored by the Archbishop of York, Dr John Sentamu, to propose ways of tackling deprivation, exclusion and inequality in the city.
A report to the council’s cabinet, which will meet on Tuesday to discuss the plans, has identified the tourism tax as a means of generating more income for the authority as it battles to counter cuts in funding from the Government.
The council’s strategy and development officer, Jane Collingwood, acknowledged a tourism tax would create “conflicting issues” for the city. She admitted the authority would not want to implement a charge that could “deter visitors” or “undermine the profitability” of the tourism sector.
But the report states the council is prepared to “explore all ideas that could help increase income” and the “full implications” of a tourism tax will be explored with businesses and Visit York.
The chief executive of Visit York, Gillian Cruddas, claimed the tourism partnership is “fully supporting the principles of the Fairness Commission”.
But she added: “It is vitally important to protect and nurture York’s important tourism sector which generates 23,000 jobs in the city.
“Mostly importantly York has to be able to compete on a level playing field with other cities across Britain and Europe.
“Visit York’s tourism strategy focuses on income generation and visitor spend rather than volume and visitors already generate £443m of income for York annually.
“These proposals would need to be very carefully considered in light of this and we could only give a full response once all the issues have been debated.”
York attracts more than 7.1m visitors each year, whose spending equates to seven per cent of the region’s overall tourism industry. Accommodation accounts for £46m of the overall visitor spending in the city.
The Treasury said there would need to be an overhaul of legislation to instigate a national tourism tax.