|The Tourism Alliance is today publishing a new report: “Taxing Tourists: The UK vs Competitor Destinations.”
Today, World Tourism Day, is a good time to look at where the UK sits in terms of its competitiveness with other destinations around the world.
“Taxing Tourists” looks at 12 overseas destinations and what level of taxes are levied on tourist accommodation, including sales tax and ‘tourism taxes’, compared to the UK.
- Because of the high rate of VAT on accommodation in the UK (20%) tourism accommodation here is taxed higher than almost all other destinations we looked at – even those with a dedicated tourism tax.
- The average couple staying in a three star hotel in the UK would pay £25.33 per night in taxes. In Berlin they would pay £15.20 and New York £21.36.
- The average rate paid in Amsterdam – the only destination with a higher rate – is currently just 7p ahead of the UK to support their policy of reducing tourist numbers.
There is often discussion and debate about the level of taxes paid by tourists – both domestic and international – with the regular assertion that tourists ‘don’t pay their way’. This research shows that the opposite is true. Even without a dedicated tourism tax, tourists in the UK pay more than many other competitor destinations in taxes, which in turn contributes to the UK’s position as dead last amongst countries for price competitiveness according to the World Economic Forum. [Note 1]
Richard Toomer, Tourism Alliance Executive Director, said:
“World Tourism Day is a good time to remember that tourism is a global and competitive marketplace. There are many great reasons why people want to holiday in the UK – our vibrant cities, our amazing cultural and heritage attractions, our beautiful countryside, and our wonderful coast among many others. Our tourism businesses also offer world-class products and customer service.
“Yet we remain uncompetitive against many other destinations for a variety of reasons, including the taxes we levy on overnight tourists.
“Public finances – especially at the local level – are under a lot of pressure, and attention all too often falls on tourists to plug that gap. There have been calls by some for a tourism tax to be implemented in England as is being pursued by the governments in Wales and Scotland.
“But it’s vital that this debate is held in the right context. Overnight tourists in the UK are already taxed more than Berlin, Barcelona, Dubai, Greece, Las Vegas, New York, Paris, Rome, Turkey, and the Balearics. We are just a few pence behind Amsterdam whose tourism policy is actually to dissuade tourists from visiting.
“While we think there is a debate to be had about how the taxes paid by tourists in the UK can be better spent to support the visitor economy, and help local authorities provide for the services and assets tourists need in destinations, it cannot be said that higher tax rates are justified. We are already dead last – 140th out of 140 countries – for tourism price competitiveness. If we want to continue to grow our visitor economy we must improve that, not make things worse.”
- World Economic Forum, The Travel & Tourism Competitiveness Report 2019 https://www.weforum.org/reports/the-travel-tourism-competitiveness-report-2019/
- Taxing Tourists: The UK vs Competitor Destinations can be downloaded from the Tourism Alliance website: https://tourismalliance.com/report-taxing-tourists-the-uk-vs-competitor-destinations
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