Tourists may be required to pay tax on their accommodation under new proposals by Labour councillors in Westminster.
The tourist tax would be levied on hotel bedrooms and Airbnb accommodation and the profits spent on facilities such as public toilets and parks, as well as policing illegal short-term lets.
The councillors proposed a taxation system similar to those already operating in Paris, Rome and Venice, where the charge is based on a hotel’s star rating. Airbnb accommodation would be classed as three stars. Labour claims a charge of £1 per night per star could raise £25 million every year.
Paul Dimoldenberg, Environment and City Management spokesperson for Labour, said: “Tourism is a very important part of Westminster’s economy. But there are also costs of keeping the city attractive and providing the everyday public service which visitors expect to see. A small tourist tax would help to pay for the cost of providing facilities which tourists enjoy – keeping the environment clean and tidy, maintaining parks, street lights and open spaces, public toilets, policing and emergency services.”
The money raised would also be used to crack down on illegal short-term letting in the borough.
Conservative councillors in Westminster considered a similar tax in 2011 as part of a plan to make over £20 million of cuts. Bath and Edinburgh councils have also discussed introducing a tourist tax.
But plans to introduce the tax have been met with fierce opposition from the hospitality industry. As of 2015 there were 485 hotels in Westminster, significantly more than in any other London borough.
Kate Nicholls, Chief Executive of trade association UK Hospitality, said: “There has been no thorough examination of options or any assessment of the impact on businesses or consumers. Hotels and tourist businesses are already major contributors to public funding and there remains a distinct lack of clarity from all local authorities proposing a tax as to what the money would be spent on and what actual benefits would be delivered.”
“If any local authorities are considering the introduction of such a tax, we need a full and comprehensive examination of the impact and a dialogue about hotels and accommodation providers can be supported to offset this significant cost.”
Labour councillors proposed a three-year strategy for spending the funds, to be reviewed annually, and said it would consult with the local tourist sector and the public.