Guernsey Hotelier Expresses Concern Over GST’s Potential Impact on Tourism

A hotelier in Guernsey has expressed a view that the implementation of a goods and service tax (GST) might lead tourists to opt for alternative holiday locations. The island’s politicians are set to introduce tax reforms, scheduled to commence in 2027, which encompass a 5% GST, reduced income tax rates for incomes below £30,000, and social security adjustments. Will Haegland, the general manager of the Pandora Hotel located in St Peter Port, stated: “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 spearheaded the proposals for a GST, affirmed that the island’s politicians had made a crucial decision to generate funds for public services. Mr. Haegland, however, indicated that his primary apprehension revolved around the potential implications of a GST for the island’s competitive standing. He elaborated: “It means everything will go up in price, food and drink as well as accommodation and go back on the consumer.” He added: “This will potentially have an impact on our competitiveness in the market.” An amendment concerning the States’ GST proposals has been approved, which mandates the government to investigate the benefits, drawbacks, and effects of levying the tax on food items. Mr. Haegland expressed a desire for clarity on the operational aspects of a GST, specifically regarding tax reporting to the government. He commented: “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 further suggested: “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.” The Guernsey airline Aurigny has experienced a season marked by disruptions, and the island’s ferry schedules for 2025 remain unreleased because the government is in the process of selecting a new service operator. Mr. Haegland remarked: “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.” He added: “All of this comes on top of the uncertainty and the issues that Aurigny has had this year.” Mr. Haegland stated that the hotel, which has been under the management of the same family since 1972, was improbable to cease operations. However, he noted that travel-related challenges and the GST could affect its operational methods and occupancy rates. He observed: “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 continued: “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 further emphasized: “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.” For several years, island politicians have engaged in discussions regarding the implementation of a GST on the island to address a deficit in government finances. Roffey, who presided over the successful debate last week concerning the introduction of a GST, asserted that no superior method existed for generating the required funds.