LONDON: The vast majority of British families would cut back spending on domestic vacations if the government pushes ahead with a proposed tourism tax, according to a survey, as consumers grapple with a rise in the cost of living.
Some 73% said they would stop taking vacations in England, reduce trips or cut how much they spend during visits.
More than half of the roughly 10,000 people surveyed by Stack Data Strategy opposed the proposed levy.
“This is just political kryptonite,” Allen Simpson, chief executive officer (CEO) of the UK Hospitality lobby group that commissioned the survey, said on a call with reporters.
The UK hospitality sector is already struggling after a raft of tax hikes by Chancellor of the Exchequer Rachel Reeves.
Earlier this year, British pubs were handed a support package in a government U-turn following a backlash over property tax increases due to come into effect.
Under the holiday tax proposals, regional mayors would be handed powers to implement a visitor levy on overnight stays in England.
That could be an added percentage on the price of accommodation or a flat rate.
Legislation has already passed in Wales and Scotland, with Edinburgh set to charge 5% before value-added tax (VAT) from the end of July.
A government spokesperson said the details of the tax haven’t been decided.
“We’re clear that the levy will ensure areas benefit even more from tourism and mayors will have more money to invest in local priorities,” the spokesperson added.
The levy wouldn’t just impact domestic tourism to places like Blackpool but also international visitors travelling to some of the United Kingdom’s most popular destinations including London.
The UK capital has already become a less competitive retail destination since the end of VAT-free shopping.
A 5% tax on overnight stays would result in a £1.8bil hit to overall tourism spending as visitor numbers drop, according to Oxford Economics research that was also commissioned by the lobby group.
The move puts 33,000 jobs at risk, it estimated.
“There’s a relentless chain of taxes and costs that are coming our way that continues to increase,” Jon Hendry Pickup, CEO of holiday parks operator Butlin’s, said in an interview. “When does it stop?” — Bloomberg
