On a holiday to Amsterdam aged 19, I first became aware of tourist taxes. I’m not going to pretend they ruined the trip or that they were extortionate, but as a teenager who had scraped his cash together for a getaway, getting slapped with an unexpected bill upon checking into my hotel was pretty disgruntling.
A tourist tax has recently been introduced in the Spanish Balearic Islands in a bid to protect their local ecosystems. While noble in intention, visitors are asked to pay a daily fee of around two euros depending on the quality of the hotel or resort in which they are staying. It may not sound like much, but this fee over the course of a few weeks with a large family could hurt those who wish to travel on a tight budget.
Foolishly, cities in the UK – Edinburgh, London and Bath – are contemplating following this European trend. I’m from Bath, and as much as the incessantly busy city centre can be a grind at times, we also know that the city thrives on tourism. I’ve spent my university life working seasonally in a restaurant just outside the city. We rely on the wheel of tourism churning out new potential customers to keep ourselves rolling on.
The consequences of a tourist tax may seem minor at first, particularly as the main argument for it is that the tax will be so low that it will barely be noticeable, but although it’s unlike an extra ten pounds per night would dissuade me from visiting a country or an area, it would certainly make me more likely to stay in an Airbnb, which is unlikely to be tax registered and so unlikely to be included in any collection of a tourist tax.
Driving up the numbers of Airbnb units wouldn’t necessarily be a bad thing. However, in the long run, it would sound a death knell for the hotel industry in the same way social media has killed off the local press. Again, this isn’t necessarily a bad thing, but if a particular industry fails and dies, it should be because it cannot compete within a free market, not because the government erects unfair barriers against it.
As with all taxes, once a levy has been introduced, what is there to stop authorities raising it? While five pounds per night may not sound much, a creeping tourist tax would diminish a city’s ability to compete against other European cities, and even their neighbouring domestic ones. At the start of May this year, authorities in Ibiza and Mallorca doubled their tourist tax, and have even slapped it onto holidaymakers on cruise ships.
Granted, this is a fairly middle-class problem to have, but there are plenty of reasons why we should all be worried about tourist taxes popping up everywhere. A tourist tax would put cities at a comparative disadvantage to their domestic and international rivals. For the United Kingdom, especially post-Brexit, even the small things count.
Matt Gillow is a Co-founder and Director of Strategy of 1828.