GST could see tourists go elsewhere - hotelier

Will Haegland says tourists could look elsewhere if prices rise through GST

A Guernsey hotelier believes introducing a goods and service tax (GST) could see tourists choose other holiday destinations.

Island politicians plan to introduce tax reforms including a 5% GST, lower income tax rates for earnings under £30,000 and social security reform, to start in 2027.

Will Haegland, the general manager at Pandora Hotel in St Peter Port, said: "People are looking at prices and costs and if our pricing is increasing further that might stop people looking at Guernsey as a holiday destination."

Deputy Peter Roffey, who led the plans to introduce a GST, said island politicians made a necessary decision to raise money for public services.

Mr Haegland said his main concern was about what a GST could mean for the island's competitiveness.

"It means everything will go up in price, food and drink as well as accommodation and go back on the consumer," he said.

"This will potentially have an impact on our competitiveness in the market."

An amendment to the States plans for GST has been passed, meaning the government will have to explore the advantages, disadvantages and impact of applying the tax to food.

'Uncertainty'

Mr Haegland said he wanted to know how a GST would work in terms of reporting the tax to the government.

"If you look at some of the European countries, they have a different tax rate for accommodation and food and beverage providers than they have for other good and services," he said.

"I think that could be a consideration to do in terms of wanting to be a destination and build on tourism which is an important element of the economy."

Guernsey airline Aurigny has had a disrupted season and island ferry schedules for 2025 haven't been published due to the government choosing a new service operator.

Mr Haegland said: "I've spoken to two guests who are looking for September next year but they can't book because there are no ferry schedules which is the same for people coming from France.

"All of this comes on top of the uncertainty and the issues that Aurigny has had this year."

'Significantly down'

Mr Haegland said the hotel, which has been operated by the same family since 1972, was unlikely to close but travel issues and GST could impact on how it operated and its occupancy levels.

"Last month was significantly down from last year, we are now in November and we are hoping it will meet last year's figures but currently they don't," he said.

"Those things have an impact and if you see that it costs you more to be open than being closed, being closed over the winter might be something some operators choose to do.

He added: "The key thing for us is that we have traffic into the islands that supports tourism and that we are competitive in the bigger world of tourism and travel."

Island politicians have been discussing the introduction of a GST in the island to fill a hole in government finances for several years.

Roffey, who led the successful debate last week on introducing a GST, said there was no better way to raise the money needed.