Holiday accommodation on the Yorkshire Coast could face a five per cent price hike under new government plans, prompting local businesses to warn the levy could devastate the region's tourism sector.
Stays in coastal hotels, hostels, and holiday parks could become up to five per cent more expensive under new government devolution reforms.
A proposed overnight visitor levy will give local leaders the power to implement a charge on holiday accommodation to help fund local infrastructure improvements.
However, tourism leaders across Scarborough and Whitby have warned the extra cost could devastate trade during an ongoing cost-of-living crisis.
Accommodation providers have expressed severe concerns that the region's price-sensitive domestic market cannot absorb the additional fees, especially when compared to cities that attract international tourists.
The concerns were raised during a roundtable event in Whitby on Thursday, convened by Scarborough and Whitby MP Alison Hume, to gather the views of local businesses.
Ms Hume noted that the Yorkshire coast operates as a very different market to York, which attracts substantial numbers of overseas visitors who are already accustomed to paying visitor levies in destinations across Europe.
Ms Hume said:
"Tourism is the lifeblood of Scarborough, Whitby and the surrounding villages, so it was important to bring together businesses and stakeholders from across the sector to hear their views directly.
"It was a constructive, informative and extremely worthwhile discussion where people spoke openly and frankly.
"Every area of accommodation was represented - from hotels to hostels to holiday parks and short term lets. The overwhelming view was that introducing a levy on stays in our coastal communities during a cost of living crisis and at time when businesses are under pressure from changing visitor behaviours, high utility bills, staff costs and VAT at twenty per cent, this levy could potentially be the straw that breaks the camel’s back. Understandably, the sector is extremely worried and nervous.
"I do believe we need more detail before any decisions are taken.
"Businesses want real and quantifiable answers on how a levy would work in practice and what it might mean for their visitor numbers and trade."
Initially, a report commissioned by York and North Yorkshire Mayor David Skaith recommended a flat one-pound-per-night charge across the region.
However, this approach has now been superseded by a government announcement that the levy will be percentage-based, with Labour mayors proposing a cap of five per cent of accommodation costs.
Ms Hume has previously made it clear she remains unconvinced about how the levy would function in price-sensitive coastal markets, given their popularity among domestic tourists and families.
During the meeting, stakeholders raised several practical questions, including whether exemptions would apply and what would happen when North Yorkshire residents take holidays on the Yorkshire coast or elsewhere within their own county.
The MP also used the Whitby meeting to call for Scarborough and Whitby to benefit directly from any monies raised within their boundaries.
Ms Hume added:
"I’ll continue working with tourism businesses, hospitality leaders and Mayor David Skaith to press for detailed economic impact assessments to prove that the benefits of a levy will outweigh the costs of administering it and also ensure our communities have a very loud voice in this conversation."
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