Manchester to charge 'tourist tax' on hotel stays

[Quickstatus]

I always want taxes to be explicitly stated and not rolled into the price. One way to keep the B honest

 

[AIRwin]

What tourists want to visit/stay at Manchester?

I went on a day trip from London Euston station last year - but it was to catch up with a friend before I flew out of LHR the next morning...

 

[VPS]

I should have said not material.



Old Trafford
Man United
Coronation Street
Need I go on?

I'm there for a couple of days in May

John Rylands Research Institute and Library (The University of Manchester Library) and this was excellent

 

[NM]

Old Trafford
Man United
Coronation Street
Need I go on?

Please don't

 

[stm1sydney]

Economic effects always occur at the margins. For the filthy rich frequent fliers active on this forum, of course one or two dollars won't have an effect. But for those right on the margin of deciding whether to stay at place A or place B, it does have an effect. And it becomes more of an effect when the tax inevitably rises year after year to 10 or 20 dollars.

 

[RooFlyer]

Economic effects always occur at the margins. For the filthy rich frequent fliers active on this forum, of course one or two dollars won't have an effect. But for those right on the margin of deciding whether to stay at place A or place B, it does have an effect. And it becomes more of an effect when the tax inevitably rises year after year to 10 or 20 dollars.

I take your point, but given that all the accommodation places in Manchester will have to charge the levy, it’s either going to scare people away from staying at Manchester altogether or it will just have to be accepted if you want to stay there.

I think the price variation in staying somewhere other than Manchester, if that’s where you originally wanted to stay, would far outweigh the tourist levy.

 

[stm1sydney]

Yeah, my point is that people right on the margin of deciding whether to stay in Manchester or Liverpool (for example), will go to Liverpool all other things being equal. We are not on the margin in this case because we are filthy rich (compared to the rest of the world's population), but I'm sure we have all made a decision sometime based on a few dollars difference when everything else is equal.

 

[justinbrett]

Yeah, my point is that people right on the margin of deciding whether to stay in Manchester or Liverpool (for example), will go to Liverpool all other things being equal. We are not on the margin in this case because we are filthy rich (compared to the rest of the world's population), but I'm sure we have all made a decision sometime based on a few dollars difference when everything else is equal.

All things are not equal though. Much bigger factors at play with hotel selection (location, ratings, amenities, hotel chain, price) , I doubt £1/night would make someone switch cities. I think most would get a slightly cheaper hotel if they had to, rather than switching cities.

Considering a single coffee from Costa/Starbucks is more than £3, I really can't see it making it any difference.

 

[stm1sydney]

You're not really understanding the concept of margin because you are not at the margin. I can't explain it very well, this article might help:

Margin: Concept, Importance and Roles | Economics

In this article we will discuss about:- 1. Meaning of Margin 2. Importance of the Concept of Margin 3. Special Role. Meaning of Margin: In economics, the concept of margin has a great importance. The marginal unit of anything is the unit whose small addition or subtraction is under...

www.economicsdiscussion.net

(in the context of consumer demand).

 

[justinbrett]

You're not really understanding the concept of margin because you are not at the margin. I can't explain it very well, this article might help:

Margin: Concept, Importance and Roles | Economics

In this article we will discuss about:- 1. Meaning of Margin 2. Importance of the Concept of Margin 3. Special Role. Meaning of Margin: In economics, the concept of margin has a great importance. The marginal unit of anything is the unit whose small addition or subtraction is under...

www.economicsdiscussion.net

(in the context of consumer demand).

Don't belittle people.

If you think £1 is going to stop someone visiting a city, they probably couldn't afford to go in the first place.

 

[stm1sydney]

I am not belittling you, I am talking you up. The economic concept of margin is a real thing. (The person at the margin can afford to go, they just need to decide between Manchester and Liverpool.)

 

[justinbrett]

I am not belittling you, I am talking you up. The economic concept of margin is a real thing. (The person at the margin can afford to go, they just need to decide between Manchester and Liverpool.)

Just because I don't agree with you, doesn't mean I don't understand the concept.

If you read my post I said there are other things with far more influence on people at the margin than a £1 tourist tax.

 

[dajop]

The variation in hotel prices from day to day, week to week is probably far more influential for strapped travellers than a £1 tourist tax.

Picked a random Premier Inn in Manchester (so low end, not high end) and the variation is considerable. 13 Jun £76 14 June £103.50 15 June £58 16 June £96 17 June £106 18 June £42.50 19 June £87 20 June £71.50 ....

 

[VPS]

And Wales is thinking about it

Tourism tax: Wales' plan for charge on visitors moves closer

Opponents say it will put people off visiting, but supporters believe it will help maintain areas.

www.bbc.com

 

[dajop]

I wouldn't mind a hotel 'tourist tax' applied here in Tas, as long as it goes to the local council, not the state govt. Where I live, the east coast, we get a gazillion tourists coming in, using infrastructure and services provided by the local council with a low population and rate base.

$1-2 a night a room wouldn't be noticed.

Although according to this document in 2021 there were 7511 hotel rooms in Tas in 2021. Assume 80% occupancy ,that's 2.2m room nights per year, so a $1 room tax would raise $2.2m. Assume (it's government) $500K to administer, then you're left with $1.7m. Split it out by councils, that $58k per council assuming evenly split.. not entirely sure how much a difference it would make.

 

[RooFlyer]

Although according to this document in 2021 there were 7511 hotel rooms in Tas in 2021. Assume 80% occupancy ,that's 2.2m room nights per year, so a $1 room tax would raise $2.2m. Assume (it's government) $500K to administer, then you're left with $1.7m. Split it out by councils, that $58k per council assuming evenly split.. not entirely sure how much a difference it would make.

I was going to say that on top of hotels, you have to add SC apartments and Airbnb places, of which there are many, but looking at that doc, they are included, so fair enough.

So, make it $2 a pop or $5 I can assure you $100K ($2) would be a god-send to many of the micro councils we have here, although the #rooms would be heavily biased to Hobart metro (yes, 4 councils!) and Launnie. Even Hobart might then put some damn signs up to help direct people ...

 

[Quickstatus]

You're not really understanding the concept of margin because you are not at the margin.

That's is an incorrect application of margin. Margin in the economic context refers to the additional or extra unit. Eg marginal cost = the cost of producing (or buying) one additional unit of production. Marginal utility is the satisfaction from eating additional piece of KFC. Simplistically, consumption occurs when marginal utility is greater than marginal cost.

Price Elasticity of Demand more properly makes your point. To what extent does a change in price affect demand.

In general, the tourism market is relatively price inelastic.

 

[stm1sydney]

That's is an incorrect application of margin. Margin in the economic context refers to the additional or extra unit. Eg marginal cost = the cost of producing (or buying) one additional unit of production. Marginal utility is the satisfaction from eating additional piece of KFC. Simplistically, consumption occurs when marginal utility is greater than marginal cost.

Price Elasticity of Demand more properly makes your point. To what extent does a change in price affect demand.

On the production side, yes. On the consumer demand side, the paper I linked to explains:

"Similarly, in the theory of consumer demand, the marginal purchasers are those who are just willing to buy at the prevailing price and would cease to purchase at a higher price."

But you could call it price elasticity if you want.

 

[Quickstatus]

the marginal purchasers are those who are just willing to buy at the prevailing price and would cease to purchase at a higher price."

It's more correctly explained by elasticity of demand. There are many marginal buyers each with their limit. An auction is an example of a group of marginal buyer - each having their own "limit". The problem with using margin is that it does not account for marginal utility and also the extent to which marginal utility is greater than marginal cost (the extent to which their purchase is value for money paid).

Increasingly local towns and regions are realising they are better off attracting tourists who are price indifferent rather than those who are price conscious. The numbers might drop but the revenue per tourist goes up.

 

[Pele]

Malaysia started charging similar this year ... MYR10 so about AU$3.

Malaysia's one has been around since 2017. For whatever reason the government paused it during the pandemic and from 1 Jan 2023 they restarted it.