Should Oxford impose a tourism levy?

Ruth’s Lib Dem motion for Oxford City Council to lobby nationally for the power to impose a tourism tax was carried unanimously with cross-party support at Full Council on Monday.

The issues around tourist taxes are quite complex. Here is the text of Ruth’s speech.

In his 2007 inquiry into local government, Lyons recommended that the Government should consider legislating to allow some authorities to introduce a tourism-related tax where appropriate.

In January, the London Finance Commission reported on options for a tourist levy. It sets out international comparisons and estimated revenues.

Here are some broader economic arguments that have been made about tourist tax.

  • Tourists impose costs on the host society that are not paid for by the tourist. Residents should be compensated.
  • Tourists consume un-priced natural amenities and public goods
  • The tourism sector should bear the costs of promotion
  • Tourist taxes are common in many European cities
  • Hotel taxes may lead to a decrease in demand
  • The tourism sector is already heavily taxed in terms of ticket taxes, airport taxes and VAT
  • Tourist taxes shouldn’t only be levied on hotel accommodation
  • The admin burden would fall on businesses

How could a tourism-related levy work?

  • Flat rate per night’s stay e.g. in Lisbon
  • Percentage per hotel stay cost e.g. Berlin and Amsterdam
  • Flat rates set in bands e.g. according to star rating like in Paris and Rome

AirBnB has agreed with Amsterdam authorities to simplify the payment of the tourist tax by collecting and remitting those taxes on behalf of hosts.

There are alternative voluntary schemes too but audit would need to be transparent.

In Hackney, a £1 per night voluntary donation is added to guests’ hotel bills for:

  • hospitality training schemes supported by council programmes
  • Support for cultural events
  • Improvements to public spaces

The Heart of the Lakes accommodation company in the Lake District automatically adds £2 to every invoice it raises – guests can opt out (but don’t)

There are Tourism Business Improvement Districts in Loch Ness and Torbay, and consultation is underway on another one in Birmingham.

Westminster, Birmingham, Brighton, Bath, Edinburgh and Cornwall have all considered a tourist tax in recent years but none have gone ahead because the power to impose this has not been devolved by national government.

Camden Council wants to charge a tourist levy of £1 per person per night to use for extra street cleaning in popular areas like Camden Lock.

The figures for average hotel stay in Oxford are different from those in London where the average stay is much longer at 5.83 days. Inbound tourism is set to increase with the Westgate retail offer but how much of this will translate into increased hotel occupancy?

The devolution of power to local authorities to impose tourist taxes may be well worth fighting for, at a time of post-Brexit uncertainty and public spending cuts. I look forward to a wider debate.

Here is the text of the motion that was agreed.

Power to impose a tourist tax in Oxford

Council notes that a number of local authorities are currently lobbying for the power to impose tourist bed taxes or “hotel levies”. These include Camden, Westminster, Bath, Birmingham, Brighton, Edinburgh and Cornwall.

Council also notes the recent support by the Mayor of London for the introduction of such a levy following the publication for the London Finance Commission by the GLA of Working Paper 83 entitled Options for a tourism levy for London. This report gives details of tourist taxes levied across the world in cities that have a high proportion of tourists.

Council recognizes that the British Hospitality Association is strongly opposed to any imposition of a bed tax, and that the VAT rates in the UK on hotel accommodation are much higher than in other EU countries.

Oxford is the seventh most visited city in the UK by international visitors and is the tourism gateway to the rest of Oxfordshire. The opening of the new Westgate retail offer is expected to generate increased visits to Oxford. Council welcomes tourism in Oxford as this brings many benefits to the City, however this does bring with it an extra demand for infrastructure and environmental improvements, and cost to the Council of increased workload in some departments, for example Streetscene and Parks.

Council notes that there are uncertainties ahead post-Brexit with respect to Oxford’s economy, and that it may be wise to join other authorities in lobbying for the power to introduce and retain a tourism levy.

Council therefore asks the Chief Executive and the Leader of the Council to work with other local authorities representing cities with high rates of tourism to lobby jointly for the devolution of the above power. It further requests that Council writes to Oxford’s two MPs to inform them of this Council’s motion and ask for their support.

Useful references:

https://www.london.gov.uk/sites/default/files/tourism-levy-for-london-wp83.pdf

http://uk.businessinsider.com/sadiq-khan-calling-for-visitors-to-be-hit-by-new-tourism-tax-2017-1

http://www.independent.co.uk/travel/news-and-advice/could-bath-be-the-first-uk-city-to-bring-in-a-tourist-tax-a7516856.html

 

2 thoughts on “Should Oxford impose a tourism levy?

  1. John Gardner says:

    I totally agree that tourism is out of hand in Oxford. But the approach of levying a supplement on hotel rates is totally wrong for the city. We have a shortage of hotel accommodation and it is already overpriced. This increases the demand (and hence the supply) of airbnb rentals, which take scarce housing out of local use and add to rent inflation for local people. To deal with this we simply need to be much more hardline about treating airbnb rental as a change of use to business premises. We should also have the power, if we don’t have it already, to make sure that airbnb rentals are licensed like HMOs, with strict conditions. This will redice the relative attraction of airbnb and make ordinary hotels more attractive (to build and to use). Which is what we need.

    But all this is in a way irrelevant to our main problem. Our main problem is with (a) day tourists and (b) teenagers on ‘summer schools’ accommodated en bloc by our educational isntitutions (or hosted by local families). These people don’t use hotels or airbnbs and have no effect on the housing market. But they have a severe effect on the city centre environment and the city’s amenities. What we need is (a) a licensing/toll system for non-scheduled coaches entering the city and (b) a settlement with hosting institutions on how many teenagers are to be accommodated on summer schools.

    It is wrong to say that the teenagers contribute nothing to the local economy, of course, but they are low-end tourism from the point of view of most businesses in the city. They have very little to spend. And they are becoming a blight, like swarms of bees on every street corner and at every bus stop. The activism that Barcelona is seeing now, we will see in a few years. It will partly be focused on airbnb/housing but it will also be focused on the overwhelming of our streets by dopey kids.

    • Thanks John. Teenagers on summer schools are a particular challenge in that a number of the ‘schools’ in which they are enrolled are ‘pop up’ schools not known to the council or to the police. Often these have addresses overseas, possibly with PO Box numbers, which makes them really difficult to identify and we often don’t know they exist until we come across their students. The new local plan proposals will limit new build for summer and language schools. There is no requirement for these institutions to abide by a recognised code of conduct (although the major ones in Oxford do) and this is something we are campaigning on nationally to change. There are also proposals in the Local Plan on setting down points for tourist coaches – please do take a look at this and send in your comments as I think the planning officers would welcome them. See https://www.oxford.gov.uk/downloads/download/877/oxford_local_plan_2016-2036_preferred_options_document R

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