Events industry leaders have joined the hospitality sector in raising concerns over the Government’s decision to give mayors and local leaders across England powers to introduce an overnight visitor levy.
The Meetings Industry Association (MIA), Business Travel Association (BTA) and beam have issued a joint response warning that the move could make UK destinations less competitive and increase the cost of staging conferences, exhibitions and major meetings.
The Government confirmed on Thursday (10 September) that mayors and leaders of Foundation Strategic Authorities will be given powers to introduce a levy on overnight stays, following a consultation launched last November.
Under the framework, individual authorities will be able to decide whether to introduce a levy in their area, with the charge calculated as a percentage of the cost of accommodation rather than a flat fee.
The Government said money raised could be reinvested in areas including public transport, high streets, events and other infrastructure to support the visitor economy.
Responding to the announcement, the MIA, BTA and beam said the decision was “a short-sighted move that risks making Britain’s cities less competitive at exactly the moment we should be doing everything we can to attract investment, events and business”.
“Business travel is not tourism, and there is a real risk that distinction gets lost in this debate. Adding another accommodation charge on top of the UK’s existing 20% VAT makes Britain more expensive for the very people and businesses we need to attract,” they said.
The organisations acknowledged that visitor levies are already widely used across Europe and could provide valuable funding if revenue is reinvested into tourism, infrastructure and services that help destinations attract more events and visitor spend.
However, they raised concerns about the potential for different approaches between destinations, warning that a “patchwork” of charges and rules could make it harder for businesses to operate and create inconsistency for international clients.
They also highlighted the potential impact on the meetings and events sector, where large conferences and exhibitions can generate hundreds or thousands of room nights.
“Even a modest charge can become a significant additional cost. Organisers compare destinations closely and, if the cost of bringing an event to one UK city becomes uncompetitive, they can choose another destination, taking with them spending on venues, hotels, restaurants, transport and local suppliers,” the organisations said.
They called for transparency over how money raised is reinvested and greater consistency in how levies are implemented, adding: “Tourist tax can have a role to play if it is used as part of a reinvestment cycle to make destinations more attractive. But if it simply adds another business cost, the biggest risk is that it makes the UK less competitive at a time when we need to be doing everything we can to strengthen it.”
The announcement has also prompted a strong response from the wider hospitality sector.
UKHospitality warned that giving local leaders uncapped tax-raising powers could damage the sector, citing independent economic analysis estimating that a 5% levy could put 33,000 jobs at risk and reduce GDP by £2.2 billion.
Allen Simpson, chief executive of UKHospitality, said the levy would add further costs to a sector already facing significant tax pressures and called on the Government to reduce hospitality VAT.