Over-tourism: Could a tourist tax create harmony between residents and visitors?

In the last of our series on possible solutions to tackling over-tourism, we consider how a tourist tax could be introduced in York in a way that creates benefits and greater harmony between businesses, residents and visitors


Like many destinations, York is struggling with its own popularity. Millions of tourists visit the small city every year, which can impact the environment and its infrastructure, and cause tension between residents and visitors. 

But does that have to be inevitable; or could a more sustainable model address these issues? One proposed solution is a tourist tax. In part one of this series, we found qualified support from York’s hospitality leaders; and part two found both locals and visitors that we interviewed supported the concept. 

It is, of course, one thing to back a policy in principle. But how could it work in the real world? And in a way that its benefits will last?  


Tourist taxes at work


1. Manchester

York could look to other cities which have already introduced a tourist tax for inspiration. In Manchester, hotels and short stay serviced apartments in the city centre above a certain rateable value are required to pay a levy, which they can reclaim by charging tourists £1 per room per night. 

There is a lot to be learned from how Manchester has structured its tourist tax. In most European destinations such a levy is collected by local government. In England, local authorities are not allowed by law to enact a tourist tax. 

So the private hotel sector has taken the lead, establishing the Accommodation Business Improvement District (ABID) to administer a tourist levy, with the support of Manchester and Salford City Councils.

Could this be a pathway for York to follow? 

The Manchester ABID has three areas for investment of the tax, with very clear aims:

As we have seen in our previous articles, how the money is spent is of crucial importance to all the stakeholders in York. The revenue from Manchester’s levy is spent on measures aiming to increase visitor numbers but also improve the look and feel of some of the city’s infrastructure.


2. Amsterdam

Amsterdam might prove to be a more relevant model when it comes to spending the tax revenue. A highly popular tourist destination, Amsterdam struggles with the number and type of tourists it attracts. Residents often complain about noisy and ill-behaved visitors.  

The revenue from its tourist tax is aimed at improving the quality of life of residents by dealing with the consequences of over-tourism. The funds are spent on green and recreational spaces, local community resources, conservation, and street cleaning. 


A tourist tax for York? 

With a fifth of York’s 8.9 million visitors staying overnight in the city every year, a small accommodation charge for overnight visitors could raise considerable funds. 

When we spoke to tourists and residents for our research, they felt that any revenue could be spent on dealing with the impacts of over-tourism, making the city a better place for residents to live and tourists to visit.  

Some of the suggestions of where to spend the money included:  

Our research also found that people would be supportive of a tourist tax only if the revenue was spent transparently.  

Visitors and residents alike were concerned that the tax might end up subsidising the local authority, allowing the council to reduce its funding on maintenance and infrastructure.  

These insights demonstrate that – to ensure the widest possible support for the tourist tax and to enable the hospitality sector to come on board – the revenue may need to be ring-fenced for additional and visible improvements to the city. 

Our research suggests that the organisation set up to administer such a scheme would need to be explicit and open about its objectives. And it could attempt to be inclusive too. York hospitality leaders told us they want a body that brings together all the relevant stakeholders. 


Next steps 

Our research participants identified and understood the challenges created by over-tourism in York. And they could see that a tourist tax might have a role to play in tackling such issues. 

If York could build on that consensus and use it to shape an approach to the tourist tax which is also tailored to the city’s needs, then progress is possible. 

We will be sharing our research with stakeholders and policymakers. It is then for the wider city to consider what to do next.

But our insights do indicate that a future York, which thrives on sustainable tourism, with visitors and residents living together in something approaching harmony, is far from an impossibility.