The pros and cons of the tourist tax

Visitors to Wales could soon be paying more to stay overnight amid plans to introduce a tourism tax in the country.

If the plans are confirmed, Wales will follow in the footsteps of Manchester, which has introduced a tourist tax for people staying overnight in the city, taking effect from tomorrow, the BBC said.

Many destinations around the world have tourist taxes, VisaGuide noted, including Barcelona, ​​Venice, Thailand and Slovenia. However, this has proven to be a controversial topic, with disagreements over whether it boosts the tourism industry or threatens its very survival.


Pro: pays for travel expenses

Proponents say a tourism tax could lead to the increasingly elusive goal of a well-run, sustainable and profitable tourism industry, with tourism spending collected in a well-managed way.

In recommending the Welsh Government introduce a tourist tax, the Bevan Foundation argued that such a move would “help reflect the true costs of tourism” such as “cleaning up litter, providing parking, keeping beaches clean” and “building public footpaths”.


Cons: shrinking consumer spending

Some believe that adding extra pounds to the cost of a holiday is dangerous at a time of a cost of living crisis. Edinburgh’s tourism sector is, for the most part, “vocally opposed to the introduction of a tourist tax, particularly in the current economic climate”, according to Holyrood magazine.

Mark Crothall, of the Scottish Tourism Alliance, told the outlet that 60% of visitors were domestic, which “may now be reaching a tipping point due to the contraction in consumer spending”.

By increasing the price of visiting certain areas, the tourist tax can help reduce overcrowding and make the experience more enjoyable. This can help avoid ‘over-tourism’ – when locals or visitors feel there are too many tourists, leading to a decline in quality of life.

For example, Bhutan “was once reluctantly open to tourists”, The Times said, but now the mountain kingdom is “raising its tourism tax to staggering levels”, charging up to $200 (£161) in tax.


Cons: Discourages visitors

The flip side is that by increasing the cost of visiting a particular place, tourism taxes could discourage some tourists from choosing destinations that actively want more visitors.

Some “consider this type of levy to be unnecessary or even harmful to the sector – driving away visitors or limiting their spending during their visit”, said accountants Knights Law. However, in a poll, hoteliers in Manchester voted 80% in favor of the tourist tax, EuroNews said, suggesting fears that it could harm tourism are not widespread.


Pro: supports investment

A tourist tax can generate additional money for local government and the tourism industry, which can be used to fund infrastructure and services that benefit both tourists and residents.

“From signage to facilities to the myriad improvements in the public realm that make places attractive,” tourism infrastructure comes “at a public cost,” said the Bevan Foundation, and “as long as the public benefits, the tourism industry also benefits,” so both parties must participate.

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Minus: lack of transparency

Some suspect that tourist taxes will simply disappear into the wider budgets of local governments. Perhaps the tourism tax’s “biggest challenges” is “ensuring transparency around how it’s used,” said Rosie Spinks at Skift.

If the money is “just going into a common bank because local finances are strained”, said Tim Fairhurst, general secretary of the non-profit European Tourism Association, and if it’s just seen as “classic ‘tourists don’t vote'”, you can take easy money from them ”, then this is “not a smart way”.

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