The day before we met at the Atlantic Hotel, the Government confirmed that strategic authorities in England will be able to introduce an overnight visitor levy. We had convened the Overnight Visitor Levy Summit weeks earlier, on the assumption that we were discussing a possibility. We arrived discussing a mechanism.
That timing did the debate a favour. It moved the conversation on from whether a levy might ever happen in Cornwall to the far more useful question of what we would need to know before anyone here decides.
A room that did not agree, and did not need to
Around the room were accommodation providers of almost every type — hotels, holiday parks, self-catering, a coastal resort — alongside attractions, a brewery, accountants and Cornwall Council. They did not leave with a shared view, and the Chamber did not ask them to. We have not taken a position for or against a levy in Cornwall, and we were not there to arrive at one.
What did emerge, repeatedly and from people whose commercial interests point in different directions, was a single sentence: no decision without independent evidence of the economic impact.
That is a process demand, not a position. It is worth saying plainly, because in a debate this polarised, anyone asking for evidence tends to be read as opposing the thing being evidenced. We are not. An independent assessment is just as free to conclude that a levy in Cornwall would work.
The part of the debate that is barely modelled
Most public discussion of a visitor levy assumes a simple sequence: the levy is added to the bill, the visitor pays it, the Council receives it. Under the Government’s proposals, however, the accommodation provider rather than the visitor is liable, and VAT applies to the total including the levy.
Our members tell us the market may not behave the way that assumption requires. Dynamic pricing and late-availability discounting are now standard. Many operators are already charging close to what the market will bear at any given moment and adjusting downwards to fill capacity, not upwards — particularly in the shoulder season, when the commercial priority is occupancy at almost any rate.
If that is right, the first-order effect of a levy would not be fewer visitors. It would be a levy absorbed out of margin, in a sector where accommodation and food was the third-highest category for UK insolvencies last year. That is a different risk from the one usually discussed, and a more serious one.
The European evidence does not settle it either way. The most substantial work — PwC’s study for the European Commission — finds that the impact of a tourism tax turns on two variables, price elasticity and the rate of pass-through, and that both vary enormously by destination. It also finds coastal leisure to be the most price-sensitive travel there is. What it cannot tell us is how those variables behave in Cornwall, in 2027 or 2028. Only work commissioned here can do that.
The scope question
The strongest point made on the day was about the boundary of the analysis. An assessment that examines the accommodation sector alone will answer the wrong question.
Cornwall’s visitor economy is around 15% of an economy worth more than £13.8 billion: some £2 billion of visitor spend a year, around 35,700 jobs, more than four million overnight visits and fourteen million day trips. But that spending does not stop at the front desk. It reaches the butcher, the brewery, the laundry, the builder who fixes the roof in January and the accountant who does the books. It also sustains things that are not businesses at all — the village pub that stays open all winter because it had a good August, the café, the shop, the bus route whose summer fares keep it running in February.
Take a little off every visitor’s spend, or a few visitors off the shoulder season, and it is the winter pub and the rural bus that feel it first. Any honest assessment has to follow the money that far. Equally, it has to take seriously the costs visitors impose on roads, beaches, water, waste and public services — costs that currently fall on the Council, which never sees the money spent in the café.
What we are asking for
Our position has not changed since our August statement, and the Summit reinforced it. We ask for three things.
First, that no decision to introduce a levy in Cornwall is taken until a genuinely independent economic impact assessment has been carried out and published. Second, that the assessment is genuinely independent — not a commissioned study whose conclusions are settled before the work begins, on either side. Third, that if a levy is implemented, a post-implementation study is published measuring what actually happened: closures, jobs, and the overall economic impact, whether positive or negative.
The earliest realistic introduction anywhere in England is 2027/28 or 2028/29. There is time to get the evidence right. There will not be a second chance to get the decision right.
