Update: the vote on the tourist tax is currently on hold

Colin Potts is the Chair of Destination Chester

What is Destination Chester ?

It is a partnership between private sector businesses, the public sector and other organisations, anyone that has a tourism stake in Chester. It was set up because there wasn’t a tourism voice speaking solely for Chester. Marketing Cheshire’s remit is much wider, covering the whole of Cheshire and Warrington.

How long have you been considering the tourist tax for ?

The idea has been considered for a long time. I became Chair in July of last year but it was being researched from the start of 2023. However, I have had it in my mind for about 25 years, ever since I first encountered it as a way of funding and supporting places in the USA, back last century. There is nothing new about the concept. I think its going to end up being the norm in the UK just as its the norm across much of the rest of the world.

Will the tax (£2 +VAT charge per room, per night) put off people from visiting ?

Theres no evidence that this happens anywhere else. It’s a very well established concept that happens all over the world, and increasingly in the UK. Manchester was the first British city to introduce it, a year ago and they have had zero resistance from the public. Cambridge are hoping to introduce it at the same time as us, Bournemouth gained the support of their hoteliers for a similar scheme about a month ago. The Scottish government announced a slightly different policy whereby local authorities in Scotland can start to levy a tourism tax, in the last week. I expect the Welsh Government to follow in their footsteps soon. The difference between our scheme and the Scottish and Welsh variants is that in ours the money raised doesn’t go to the local authority, it goes straight to the business led Accommodation BID partnership so that it can be used to bring more visitors to the city.

How will the money be spent?

The money will be spent primarily on making sure that the city is better marketed. I agree that the walls are in desperate need of repair, the city is nowhere near as well maintained as it might be and maintenance has declined over the years. That is work that needs doing, but the priority for this funding is to get more people to come to the city .

The reason for that is that the economy of the city centre has changed significantly over the last 20 years. This is largely due to changing customer habits. people are preferring to shop for big brand items in a more convenient way, they are looking to buy their goods on the internet or use out of town shopping centres. That’s happening everywhere, what it means its that its become increasingly hard for more constrained city centres to do well. What Chester needs is to find ways to make the city centre operate more effectively. Part of that is having a stronger offer – walls maintenance, street maintenance, events, festivals are all part of that. Part of it is having people just be in the city to create a buzz and an atmosphere, and that means having more people coming to live in the city. The second phase of the Northgate Development is likely to be residential based and that will bring more people into the city to support its businesses.

However what it also means is that tourism is more important than it ever has been in the past to keeping the city centre vibrant and successful, and that means better marketing . The Accommodation BID / tourism tax is one element of the city development plan alongside creating more residents and the city and creating a better offer and experience. If you put all this together you should create a climate for investment which will attract more businesses of many types to come into the city.

There are 4 main strands to the spending. One is destination marketing, making sure that Chester is seen and heard around the country, nationally and internationally. The second is promotion aimed at business visits, bringing more meeting into the city, more conferences because business visitors are generally higher spending than leisure visitors. The third is giving people more reasons to visit by improving Chester’s events programme. Chester has some absolutely fantastic events but it’s got gaps in the calendar, January through March and some gaps in the autumn. Then there is an element that will be used to improve the visitor welcome.

Will the money be used to provide services that the Council normally provide ?

No. One of the preconditions of this sort of initiative is that it must not replace things that other agencies are already doing. It’s got to be something different because you can’t allow the local authority to take its foot off the pedal . It is new money for new things.

Will the council be involved in spending the money?

This is not a council initiative and they will have no say in how the money is spent. There will be an independent board which will always be business and hotelier based. One point I haven’t made is that in the UK until now, destination marketing has been paid for by two sources: local people through council tax, and businesses. The only people who don’t pay are the tourists themselves. The fundamental idea here is that we are adding a third group to who pays for the city’s marketing and product development.

Do we need more hotels?

I think there is an opportunity for more hotels. At the moment you can argue there is a case for more hotels in some categories but not others . What we’re looking to do via this programme is to generate the business that will encourage companies of all kinds, including hotels, to invest in the city

Where will responsibility lie for spending the money raised ?

Its being collected through a Business Improvement District (BID). We already have one in the city which is geographically based. This is a sector based one. The decisions are taken by the levy payers, the hotels.

Will the tax only apply to hotels or guest houses etc ?

It is purely hotels and other forms of guest accommodation with a rateable value of £18,000 or more that are located within the Accommodation BID area which extends roughly 3 miles around the city centre. It is a requirement of the BID process that all businesses within certain specified categories, a specific area and of a certain rateable value are included. The level set rules out most of the small guest houses.

What feedback have you received so far ?

We have been talking to hotels about this for months. The priorities for spend have been identified by hotels in a number of consultations. Not surprisingly we have some hotels that are very much in favour and some that are still making up their minds.

The reason that Chester has been successful for 2000 years is that it has constantly adjusted. It was a Roman fort, a medieval port, an industrial city and a market town before it became a visitor destination in the 19th century. We are seeing another re-setting in the way Chester functions, with the emphasis moving from being so retail, dependent to being as much about experiences and people choosing to spend their leisure time here. A place where people want to hang out and enjoy themselves.

I have to say that its easy to knock the local authority, but they have recognised this and shown that they are prepared to be imaginative and take risks. The funding that went into Storyhouse, and the funding and vison that went into Northgate , with commercial partners has been really outstanding. There are areas where I think they haven’t been as effective , but in terms of capital investment they have been really efficient. What we are aiming to do is find new money to deliver the marketing that will make the most of that.

The vote will take place from June 14 to July 11 and if successful the tax will be introduced in January 2025.
For more information : https://chesterbid.co.uk/abid/