Over-tourism: Is a tourist tax the answer?

Tourism is growing fast. And that puts popular destinations – and the people who live in them – under sustained pressure. How can we guard against over-tourism and promote good relations between visitors and residents – and is a tourism tax the answer? 

 

Tourism delivers undeniable benefits. Visitors to our own city of York spent £1.2 billion in 2022 alone, helping to support 17,000 jobs. 

But this can create challenges. York is a small, medieval city with a population numbering a little more than 200,000. Yet it welcomed 8.9 million tourists in 2022. Such a large influx of visitors can sometimes cause residents to voice concerns about the impact on the city as a place to live.

What exactly is over-tourism and how does it impact other destinations? Is it possible to shape a tourism policy that allows residents and visitors to co-exist in harmony? And is a tourism tax part of the solution?  

Our mission: to do a deep-dive into the issue, find some answers and hope they are useful in shaping a sustainable solution that works for everyone – businesses, residents and policymakers. 

 

What is over-tourism?

Over-tourism occurs when destinations experience an unsustainable number of visitors, leading to overcrowding, a strain on local services and environmental degradation. 

Popular tourist destinations across the world have attempted to tackle the issue head on. Large cruise ships were banned from the Giudecca Canal in Venice in 2021 after protests from residents. In 2023, Amsterdam introduced a campaign aimed at discouraging tourists due to antisocial behaviour. 

York has yet to take similar action, even though residents have voiced concerns about overcrowding. Qa’s own research over the years has revealed the tensions wrought by the impact of tourism in the city – with some local families choosing to avoid the centre on Saturdays for fear of running into groups of stags and hens. 

Aware of these feelings, the city council has stated that they want to “reduce some of the negative impacts of tourism”.  

So how does a place like York address these challenges without damaging the economic benefits on which the city relies? 

 

The tourist tax: a sustainable solution? 

Implementing a tourist tax is often touted as a solution to over-tourism. The tax has been introduced in popular European destinations, including Rome, Barcelona and the Canary Islands.  

In the UK, Manchester became the first city to impose a tourist tax in early 2023. Other destinations are contemplating the idea. 

Tourist taxes are collected from overnight visitors. Hotels and other accommodation providers charge visitors an additional fee. The money is spent on things like cultural and environmental preservation, street cleaning, enhanced local infrastructure, and events.  

The costs that tourists incur are typically small. In Manchester, accommodation providers charge visitors an extra £1 per room per night. 

In theory, tourist taxes seek to encourage sustainable tourism by taking some of the tax burden from residents and re-investing the proceeds to help make the destination a better place to live, work and visit.

 

How could research contribute to the debate?

To help inform the debate we wanted to find out the extent to which a tourist tax could work in York. To do that, we set out to answer two main questions. Firstly, what do businesses that rely on tourism think about the idea? And, secondly, could a tourist tax foster a more harmonious relationship between visitors and residents? 

 

The hospitality sector’s view

As part of our research, we talked to representatives of the hospitality sector in York. They voiced concerns that a tourist tax might deter visitors.  

Tourism is a competitive industry. There are fears that the extra cost might persuade potential visitors to choose an alternative destination that has no such scheme. As things stand, that includes most of the rest of the UK. 

Another concern from the hospitality sector is how and where the tourist tax revenues would be spent. Who would oversee the collection and distribution of the money? How would the investment schemes be chosen? Might it be siphoned off to help cash-strapped councils meet their deficits, rather than being spent on schemes that overtly benefit the tourism industry? 

That said, our research found that the hospitality sector is not implacably opposed to the idea, and is more open to a mechanism which would bring together the various stakeholders – hoteliers collecting the levy, the destination management team and the local authority – to manage a tourist tax.

That would allow for a collective approach to setting and spending the tax. It could also incorporate a strategy to analyse the effectiveness of the investment and measure any improvements that were introduced.  

And such a body could actively promote a more harmonious relationship between the tourism industry and York residents.  

 

• Read part two here: Over-tourism: What do residents and holidaymakers think of a tourist tax?
• Read part three here: Over-tourism: Could a tourist tax create harmony between residents and visitors?
  
• For more information about Qa Research’s work in tourism, contact Richard Bryan, Managing Director, at richard.bryan@qaresearch.co.uk and 01904 6320394