Tourism tax is damaging global tourism

Tourism tax has a negative impact on tourist numbers wherever it is levied, according to CEO and president of the world Travel and Tourism Council and former Mexican tourism minister of Mexico Gloria Guevara.

Speaking last week at the Tourism Industry Council after being introduced by the UK tourism minister Michael Ellis, Guevara said those countries that were seeing the greatest increase in tourism were ones that had reduced tourism taxes and/or applied the proceeds of tourism tax to tourism itself.

Bed & Breakfast Association chairman David Weston (pictured) said Guevara put forward a strong argument for reducing taxes to boost tourism. “The UK has among the highest taxes in the world, with very high alcohol duties and the highest VAT among our main competitors, and we are 135th out of 190 for price competitiveness. This is a strong reason not to introduce tourism tax in the UK,” he said.

Guevara told the meeting that the global economy grew by 3% last year but that travel and tourism were up by 4.6% worldwide and by 6.2% in the UK, where it accounts for 10.5% of our GDP.

Weston told Luxury Bed & Breakfast magazine: “The UK is doing well but that is mainly because of the decline in the pound a couple of years ago, which obviously gave us a boost. We haven’t reduced our tourism taxes but we have reduced our prices by accident of the currency. This shows the price sensitivity of tourism.”

The association has joined the rest of the UK tourism industry in arguing against plans to introduce tourism tax in Edinburgh, he said. “That would add another layer of tax and another layer of unfairness. It would mean a B&B in Edinburgh having to charge the tax, and one in Glasgow not having to do so. This would be especially unfair, particularly if VAT were left at its current level as it would be a burden on top of all the employment taxes, business rates and all the other taxes levied on B&B owners,” he said.

Guevara’s remarks contradict the recent contention of Edinburgh council chiefs that a tourism tax is “unlikely” to deter visitors from coming to the city.