A tourism bed tax could be introduced in Birmingham to help fund a huge investment programme in the city’s cultural sector.
Council leaders are considering ways in which visitors staying in hotels might be asked to pay a £1 a night levy.
The money raised, which would run into millions of pounds a year, would be placed in a subvention fund and used to attract creative industries to the city as well as reinvesting in the existing hotel stock.
It could also help to subsidise major sporting events including, possibly, the European Athletics Championships.
Talks about the tax are at a very early stage, but initial proposals are based on setting up a unique Business Improvement District.
Rather than the usual entities based on all businesses in a clearly defined area, the new BID would cover all of the main hotels in Birmingham.
The idea is linked to a council project, the Creative City initiative, which aims to use a variety of fund-raising methods to promote cultural attractions including three new galleries and a public square around Curzon Street Station and the planned high speed rail terminus at Eastside.
Coun Tim Huxtable (Con Bournville), cabinet member for regeneration, said it was likely that the tourist tax would be voluntary.
He added: “We are exploring the possibility of a bed tax and discussing this with the hotel industry. It is a very interesting idea and is something that often operates overseas.
“The city council pays a lot of money to get conferences to come to Birmingham and hotels and local businesses benefit from economic growth, which is fantastic, but we would like a voluntary contribution to help us do even more.”
However, Coun Huxtable admitted there were “a lot of issues to be ironed out”, not least how to sell the bed tax to hotels in Broad Street and the city centre which already contribute an annual levy because they are in Business Improvement Districts.
He also plans to announce details of a £5 million council creative industries fund which companies will be able to use to finance expansion plans.
Birmingham Chamber of Commerce chief executive Jerry Blackett gave the idea a guarded welcome.
“It is at least something worth talking about. These are difficult times and we have to be a bit creative. There were plenty of sceptics over BIDs, but they have worked. I wouldn’t say this was a fanciful idea at all,” he said.
Mr Blackett added that a tax was only likely to be accepted by the hotel industry if money raised was ring fenced and used for new leisure-based investment as well as better marketing of Birmingham’s business and leisure tourism.
The notion of a voluntary tax fits well with a council push towards encouraging rich philanthropists to help fund the creative industries, according to leisure, sport and culture cabinet member Martin Mullaney.