Chester Accommodation Business Improvement District Business Plan and Proposal

The ABID will see a small visitor charge being paid by overnight visitors

Introduction

Chester is a wonderful place. An international destination for 2000 years, visitors are attracted to the Walls, Cathedral, Roman sites and historic Rows, and the oldest racecourse in the world.

The city has benefited over the past decade from significant investment, including the Northgate Development, New Chester Market and Storyhouse. A thriving independent sector has boosted city centre retail and Chester’s bar, and restaurant scene has never been better. World class attractions such as Chester Cathedral, Chester Racecourse and Chester Zoo continue to invest in their offer while Cheshire Oaks continued growth helps drive the local economy.

Future investment will see the City Gateway project regenerate the area surrounding Chester train station the second phase of the Northgate Development will provide more opportunities for people to live and work in Chester.

The ABID would introduce a small charge for overnight visitors staying in our hotels. This could raise over £1m on average per year to be invested in activity and promotion to attract more staying visitors to Chester. This would increase resources available to promote by over 600%, making a massive difference to what can be achieved.

Over the last few months, we have consulted with the accommodation sector to ensure that everyone has a say. Important improvements have been made in response to this consultation.

The ABID will be led principally by accommodation providers, delivering new initiatives that drive measurable business benefits to you and the wider city. It will fund additional activity, not replace programmes already delivered by Chester BID, the Council or Marketing Cheshire. Crucially, the ABID will add huge value to the activities of these partners and will not be another organisation.

Additional average £1m a year to attract more overnight visitors

Over 600% increase in resources available to promote the city

However, while there is so much to be optimistic about, we are at a pivotal point in Chester’s development as a tourist destination.

Compared to both the strong growth in visitor numbers pre-Covid, as well as that seen more recently in other areas of the country, Chester is falling behind. We need to reverse this trend, win back market share, and remain competitive in the face of intense competition from other destinations.

To do this, we need more resources. Destination Chester and its partners –including Chester BID, Chester Hospitality Association (CHA), and Cheshire West and Chester (CW&C) Council – are therefore supporting the development of an Accommodation Business Improvement District (ABID) for Chester.

This document sets out our proposals for new activity to drive additional business, and explanations of how the ABID will work. As the ABID is a new concept in the UK, Chester could be one of the first small cities to launch one – you will be part of something innovative, ambitious, and vital for our city’s future.

The ABID embodies the imagination, collaboration and partnership ethos Chester needs to help it flourish. As ABID proposers we sincerely hope we can count on your organisation’s support for this Proposal.

Why we are backing the ABID

Steven Hesketh Chair, Chester Hospitality Association

The ABID is the single biggest opportunity the sector has to help Chester reach its potential. All the data tells us that Chester is failing to meet pre-covid levels of occupancy and footfall and continues to fall behind its competitors, a trend that cannot be allowed to continue. If we don’t invest now even the most successful businesses will eventually begin to suffer. An ABID will be led by the accommodation providers and be focused on our priorities. ABID funding will allow us to engage new audiences and drive overnight stays while getting ahead of rival destinations who we know are looking to introduce their own ABID.

Carl Critchlow CEO, Chester BID

Chester BID was established 10 years ago and has invested more than £5million into a wide range of initiatives that enhance the city centre, attract visitors, and support our members. We know overnight visitors spend significantly more than day visitors so an ABID would enable joint campaigns and activities targeted at driving overnight stays. Directed by an independent board led by accommodation providers an ABID would amplify the sectors voice, giving a greater say in local policy decisions that impact the visitor economy.

Colin Potts Chair, Destination Chester

It is no coincidence that Chester’s visitor figures have slipped at the same time as the public and private sector funding available to promote the city have reduced. The ABID is a game changer because it requires tourists to contribute too. More money and better city marketing at no additional cost to businesses or Council taxpayers! This going to make all the difference to tourism in the city.

Cristian Marcucci Managing Director, Marketing Cheshire

As a relative newcomer to tourism in Chester, I see a real disconnect between our incredible offer and appeal as a city, and the number of domestic and international tourists we are attracting, especially when we look compare ourselves with competitor cities and destinations. The ABID offers a unique opportunity to change that, to revitalise and energise the city at the pace and level of ambition we need, in a hugely competitive marketplace. From attracting more conferences and business tourism, a smarter relationship with the travel trade, and staging a year-round calendar of events and festivals, the ABID offers the best way – and right now the only way - to invest at scale in promoting our city, improving the visitor experience, and increasing bookings and spend in hotels, leisure and hospitality businesses.

Andrew Stokes OBE

England Director, Visit Britain

VisitEngland has worked with Marketing Cheshire and its capable and enthusiastic team for a number of years, culminating in them securing Local Visitor Economy Partnership (LVEP) status in 2023. Delivering an ABID for Chester would significantly amplify the work of the partnership and provide the investment needed to grow the destination’s visitor economy.

Through this ABID, we look forward to being able to feature Chester more effectively in VisitBritain’s international travel trade work programme and marketing campaigns as well as working with you to ensure the city can benefit from more business events, raising Chester’s profile both nationally and internationally.

1. The essentials explained

Analysis of Chester’s tourism performance and discussion with hoteliers has identified the need for more visitors and longer stays. Until now, the city’s marketing has been paid for by local people, via the Council and its businesses through organisations such as Chester BID. This new scheme means that visitors will contribute too.

What it is

The ABID is an exciting opportunity to raise over £5m over 5 years in new funding to boost tourism and increase overnight stays in the Chester area between 2025 and 2029. This proposal has been developed by Marketing Cheshire, Destination Chester, CHA, Chester BID and CW&C Council.

This will be the most money the city has ever had for investment in marketing and product development and will enable Chester to compete far more effectively against our domestic and overseas competitors. The funds will be raised through a £2 plus VAT per room per night visitor charge, similar to the model successfully introduced in Manchester in April 2023.

Why it is needed

Chester is increasingly reliant on its visitor economy. While total footfall in the city centre has reduced due to changes in shopping habits over the last ten years, overnight visitor numbers have also been in decline for several years.

CW&C Council has played its part by developing exciting new reasons to visit, including Storyhouse and New Chester Market, and continues to support tourism in a host of other ways. However, as with all local authorities, its resources are very stretched so without new investment Chester will continue to fall behind the competition.

Visitor charges now exist in many cities around the world, so customers are increasingly used to paying them. Before long, such charges will likely be normal practice in the UK; Manchester has already introduced them and other cities, including Cambridge and Bournemouth, are developing plans to follow suit.

Unless we act, Chester’s visitor economy will decline. We will lose further market share to cities that have seized the opportunity to create a stronger offer and promote themselves more effectively. There is no plan B.

By introducing the ABID now, Chester will be ahead of the competition, and able to use the new funds to massively boost the city’s profile.

Cheshire’s budget to promote tourism to the city fell by 25% from 2018 to 2023. In 2023-24 it had around £150k to work with. Think what a difference having more than £1m a year will make. Let’s not pass up this unique chance to propel Chester’s tourism forward.

Unless we act, Chester’s visitor economy will decline. We will lose further market share to cities that have seized the opportunity.

The visitor charge is collected by the hotels. The hotels are then billed individually in arrears by the local authority based on a fixed room occupancy figure.

Who will be involved

Liable hotels in the ABID area (see Section 6) with a defined rateable value of £18,000 or more will receive this Business Plan and be invited to vote on the scheme in June and July 2024. If the vote is in favour, all of those accommodation providers in the area above that defined rateable value will be included in the ABID, which will start in January 2025.

How it will work

The visitor charge is collected by the hotels. The hotels are then billed individually in arrears by the local authority based on an average occupancy rate for accommodation providers in the area. A new ABID company set up to run the scheme (based within the existing Chester BID) will then invoice the local authority.

How it will operate

An ABID company will be formed overseen by an ABID Board with responsibility for setting objectives and directing how funds are spent. The Board will be led by accommodation providers and include representatives from organisations and stakeholders involved in the visitor economy. ABID activity will be carried out by a small operational team, delivery partners such as Marketing Cheshire and wider industry experts and suppliers commissioned by the ABID board.

Partnership working

Cheshire West and Chester Council have demonstrated their support for the ABID by investing Significant funds through the Shared Prosperity Fund to develop this proposal. ABID workstreams will also form a crucial part of the new Chester Tourism Plan 2024 2029 currently being prepared by Destination Chester. This identifies tasks that will be delivered through the ABID that contribute towards measured, sustainable growth in the city’s visitor economy, and aligns with Chester’s One City Plan.

2. Chester’s challenges

Although Chester’s visitor economy has bounced back from Covid to some extent, this doesn’t tell the full story. The reality is that we are lagging behind our competitors and action is urgently needed to accelerate recovery.

Room occupancy

Chester’s room occupancy versus the England average has worsened since the pandemic. With other areas benefiting from faster growth over the past year, we were 4% below the national picture in 2023. Compare this to the period from 2012 to 2018, when Chester consistently outperformed the country, by between four and nine percentage points.

Fig. 1 Chester and England room occupancy (%) 2012-23

Source: STR/UKOS

Recent information shows that the situation is deteriorating, with occupancy and average daily rate (ADR) to the end of February 2024 some 4% lower than in 2023.

Fig. 2 Accommodation occupancy growth 2022-2023

Source: STR/UKOS

This compares with the relative growth seen elsewhere in the country. For example, York’s occupancy grew by 7% from 2022 to 2023, versus 2% in Chester, while our ADR in 2023 was approximately £8 lower than in York.1

Local and national resources

CW&C Council has lost a cumulative £693m in funding since 2012, while Marketing Cheshire has seen its income reduce by 50% and staff numbers fall by a quarter in the last five years. We are not alone in this respect, with funding changes meaning that English councils now invest only 39% of 2009-10 amounts in tourism.

Given that the Council has continued to invest in the city centre through developments including Storyhouse and the New Chester Market, there is a clear need to increase the resources available to capitalise on these investments.

Fig. 5 Local authority tourism budgets 2009-2024 (£M)

Source: The Tourism Alliance (2024)

Footfall

Footfall also remains a concern, with recovery from the prepandemic levels again slower than that of competitors. In 2023, footfall in Chester was down 7% on 2022, compared to a reduction of just 3% in the North and Yorkshire.

Looking at the trend since 2019, a -18% decline compares unfavourably with the North and Yorkshire’s -15.9% figure, and a national average of -13.5%.

Fig. 3 City centre footfall 2019-2023

Source: Springoard

An ABID for Chester

3. The Evolution of BIDs

A Business Improvement District (BID) is a business led body formed to improve a defined area. Democratically elected and locally focused, BIDs provide guaranteed funding for a defined period of time. The number of BIDs in the UK has grown significantly over the last two decades with over 330 now in operation, supporting towns, cities, and destinations.

BIDs invest millions of pounds worth of private sector funding into local initiatives and are often key stakeholders in the regeneration of their respective locations. Many BIDs are seen as trusted partners allowing them to unlock public sector funding and raise funds through commercial activity to support contributions from their members.

As the BID industry has matured the sectors ambition has also grown and the BID model is being implemented in evermore creative ways. The latest incarnation is the Accommodation BID (ABID) with versions recently introduced in Liverpool and Manchester. ABID’s focus on increasing overnight stays to boost the visitor economy under the direction of those accommodation providers that pay into the ABID.

The ABID model launched in Manchester has taken the concept one step further by enabling a visitor charge to be added to the bills of staying guests. At a time of ever reducing public sector funding this new adaptation is a game changer for the BID industry and is already generating millions of pounds of additional investment. We know other destinations are looking to introduce their own ABIDs and it is inevitable that we will see many established over the coming years.

The continued growth of BIDs is proof that the model works and an ABID for Chester would allow accommodation providers take a key role in determining the city’s future.

Not Just Another Organisation

The ABID will not be ‘Just another organisation’ to add to those already operating in Chester. With guaranteed funding for 5 years the ABID will have the staff, resources, and governance structure to deliver a range of projects and initiatives that provide maximum benefit to levy paying accommodation providers.

The ABID will be fully integrated into the existing Chester BID company to minimise overheads and maximise available funds while retaining its own independent governance. This combined BID/ABID structure will allow the ABID to hit the ground running and begin operational delivery from day one rather than having to establish itself as a brand-new organisation.

The newly formed ABID will take its position as a key city stakeholder representing the interests of its levy payers. The ABID will work alongside its strategic partners to ensure the efficient delivery of campaigns an events by sharing, resources and securing best value.

4. ABID action plan

We have outlined why Chester’s visitor economy needs an urgent boost to increase tourism and overnight stays. The following sections explain the proposed solution to the problem.

Over the last six months we have consulted with hoteliers and the wider visitor economy to help shape this proposal. The action points and budget allocation reflect the views expressed by hoteliers, including responses to the online questionnaire. Those responses rated business tourism as the highest priority, with consumer/cultural events and destination marketing closely behind.

The overarching ambition is to unite all businesses behind a shared vision of investment in new activities, a better visitor experience, and promotion that will generate more bookings and spend in Chester.

Throughout the ABID’s initial five-year timespan, the primary ambition is to increase overnight stays and business in Chester. To achieve that, we will deliver the following five workstreams, which the ABID board will continuously monitor, evaluate and, where needed, adapt its strategies to ensure maximum return on investment. We will also use the ABID monies to leverage additional funds to support the promotion of the city.

The overarching ambition is to unite all businesses behind a shared vision of investment

BUSINESS CONFERENCES AND EVENTS

Chester has a fantastic meetings product, with a range of accommodation and some unique venues. We also have a number of initiatives, such as the Cheshire Science Corridor, which can be used to generate conferences through an ambassador programme. Currently, we do not have the resources to maximise this opportunity. Our inward investment activity, whilst strong, could be augmented to secure more long term accommodation business. The ABID will allow Chester to implement the following additional activities:

Chester has a fantastic meetings product, with a range of accommodation and some unique venues

• Establish dedicated conference/business tourism capacity to market the city and manage enquiries

• Attending key conference industry events, such as Confex, to raise Chester’s profile and generate leads

• Researching and proactively identifying events that we can bid for and secure

• •Introducing a subvention funding pot to attract key higher-spending events

• Developing a delegate welcome programme including delegate cards, tent cards and environmental dressing

• Contributing to aligned inward investment activities, including enhanced attendance at UK REiiF, securing more businesses for our city

Projected five-year spend:

£1.6m

Target:

Secure a minimum of 12 substantial conferences/business events for Chester in five years

•

DESTINATION MARKETING

We already have a strong and recognisable brand, a skilled team and a close partnership. What we lack are the resources to make the most of these assets. The ABID funds will deliver the following programme of work to help drive overnight stays and more business:

• Data-driven national and international marketing campaigns

• Partnership working with Visit Britain and inbound ground handlers to secure more overseas visitors

ABID funds will deliver work to help drive overnight stays and more business

• Presence at key events, such as UKInbound and other relevant conferences/ exhibitions

• Activity to secure more location filming- a major consultation priority

• Targeted use of boosted social media

• Additional partner campaigns

• Proactive targeting of publications, influencers and media to increase coverage

• Potential development of a new visitor pass for the city

• Enhanced and additional data on our visitors, perceptions and industry performance circulated to local partners

• Development of a dedicated working group targeting the domestic and international travel trade.

Projected five-year spend: £1.5m Target:

A minimum of two major campaigns each year, doubling overall reach with national and international audiences

CONSUMER AND CULTURAL EVENTS

Events bring life and activity to a destination. They are a proven means of addressing less busy periods including extending the season. Events provide specific reasons to visit, encouraging overnight, repeat and return visits. We have a strong product, including events with real growth potential, and have seen some exciting developments in recent years. The ABID will enable us to:

• Provide a potential underwriting fund to increase the size and scope of existing events, as well as attracting new ones

Events provide specific reasons to visit, encouraging overnight, repeat and return visits

• Build on, and implement, the findings of the recently commissioned events research

• Develop and enhance events that complement our existing destination themes and unique Roman/Medieval heritage.

Projected five-year spend:

£800,000

Target: A minimum of 6 new or enhanced events in five years

VISITOR EXPERIENCE

Once visitors arrive, we need to make sure they have the best possible experience, stimulating repeat visits, generating strong word of mouth and social media recommendations. The ABID will work with hoteliers to provide and enable enhanced ‘in destination’ information (maps, guides, wayfinding, digital content etc.), an improved welcome (including support for concierge services), and enhancement of arrival points. We will establish a benchmark on customer perceptions and experience of the city in Year 1 and monitor improvement.

The ABID will work with hoteliers to provide and enable enhanced ‘in destination’ information, an improved welcome and enhancement of arrival points

Projected five-year spend:

£540,000

Target: Improved perceptions of Chester

A VOICE FOR TOURISM

A key finding of the consultation is that hoteliers would like more, and better, networking opportunities to be provided. The ABID will enable the recruitment of an ABID Manager to develop these relationships, communicate with the key agencies, and organise networking and engagement activities.

The ABID will enable the recruitment of an ABID Manager to develop relationships, communicate with the key agencies, and organise networking and engagement activities

This workstream will also deliver essential tourism research and evidence to inform and direct activity, as well as leading and supporting partners by strengthening the voice, and making the case for tourism in the city and beyond with key stakeholders. There are already a lot of groups and organisations in Chester – the ABID won’t add to this, it will provide the resources to make existing partnerships work better. Like any organisation, the ABID will have operational costs, and these have been allocated to this area.

Projected five-year spend: £502,000

Target: Demonstrable satisfaction amongst levy partners (monitored periodically)

How the ABID will work

5. A unified approach

Several options were explored to raise the new funding needed to market Chester more effectively and help deliver the change the city needs. These included a Tourism Business Improvement District where hotels and other tourism businesses would pay a supplementary charge on their business rates. Our Accommodation Business Improvement District approach was selected because it raises most money and the payment is made by visitors, rather than a direct charge to the businesses.

This focuses on a method developed, and voted for, by potential Levy payers. It ensures all relevant businesses contribute, but within a structure where they continue to control how the funding is allocated. Chester already operates a successful city centre BID, which provides a clear precedent for how effective the model can be.

The Regulations permit a BID to be exclusively concentrated on accommodation providers, giving an aligned focus and common interest amongst all participants.

A BID Arrangements are allowed to run for a maximum of five years and is usually operated through an independent company with its own Board of Directors who are responsible for the proper delivery of the Arrangements. The Levy is collected by the local billing authority.

Because this ABID Proposal is shaped by the Levy payers, expenditure can be allocated to priorities that will have most impact, such as non-peak periods. Once the Proposal is voted through, every business that comes under its definitions is required by

the legislation to contribute. Any new properties opening during the period of the ABID within its geographical area automatically participate and contribute.

The Chester ABID will be made up of accommodation providers with a description (based on billing authority records, including VOA and other such government classifications) of hotels, aparthotels, travel lodges or serviced apartments (excluding public house premises, self-catering premises and guest houses as part of the city’s visitor offer) each available for private, paid overnight booking with a rateable value of £18,000 or more and within the defined area (see Section 6).

Most BIDs raise funds through a Levy based on rateable value. An ABID can base its charge on average occupancy within a defined geographic area. Under the proposed methodology, accommodation providers in the Chester ABID can opt to collect a ‘Chester Visitor Charge’ of £2 plus VAT per room/unit, per night, from visitors staying overnight to fund the Levy they will pay.

This room/unit ‘Visitor Charge’ model is similar to those operating in cities around the world. Its benefits include: (i) creating a common interest, purpose and greater control amongst businesses, (ii) generating funding, and (iii) full cost recovery.

6. The ABID business classifications and area

The following classification describes the liable businesses currently located in the area:

An area encompassing the city of Chester, surrounding ring roads and main arterial routes which currently include the following 27 hereditaments, each with a rateable value of £18,000 or more and described (based on billing authority records, including VOA and other such government classifications) as hotels, aparthotels, travel lodges or serviced apartments (excluding public house premises, self-catering premises and guest houses) available for private, paid overnight booking as part of the city’s visitor offer:

7. Income and expenditure

The following table details the projected income over the five-year timespan of the ABID and how that money will be spent across the five workstreams

Income & expenditure table

Distribution of funds over five years

Collection Costs

Contingency & Reserves

A Voice for Tourism

Visitor Experience

Consumer & Cultural Events

Business Conferences and Events

Destination Marketing

Notes

1. Budget figures are indicative, based on the expected income using 2023 occupancy levels and property details listed in section 6.

2. Within the overall budget, the Board may vary amounts across specific items of expenditure.

3. Income may fluctuate in relation to occupancy levels and collection rates.

4. The assumed annual occupancy used to generate the budget is based on 2023 Chester average provided by STR, less 15% in Y1, 10% in Y2 and 5% in Y3, Y4 and Y5.

5. The Levy collection rate has been assumed as 90%.

6. The budget assumes that CW&C Council will follow its usual custom and practice in funding early operations of the ABID prior to collection of the first levy instalment, resulting in no net cost to the ABID. Grant funding (UKSPF) is being sourced to cover these costs.

7. A contingency of 5% of ABID income has been included in Y1 and Y5 to be carried forward as a reserve.

8. Expenditure allocations reflect the participants’ collective current priorities. These may change over the five-year period and any variations will be approved by the Board.

9. Levy demands to all ABID participants will be collected by CW&C Council, which will charge c.£16,000 per annum to the ABID for this service. Collection costs are based on the equivalent fee to CH1 BID plus a 2.5% annual allowance for inflation.

10. Efforts will be made to keep delivery costs as low as possible and minimise overheads through integration with the existing BID company and using existing delivery bodies. This excludes collection charges but includes, professional fees and core staff costs.

11. The ABID will endeavour to seek additional voluntary income to enable delivery of additional activity.

8. Chester Visitor Charge and collection

Under the proposed methodology, hotels, aparthotels, travel lodges and serviced apartments available for private, paid overnight booking in the Chester ABID area can opt to collect a £2 plus VAT per room/unit, per night, from visitors staying overnight.

This will be called a ‘Chester Visitor Charge’, and from 1st January 2025 the properties listed in Section 6 will be encouraged to recharge the amount to overnight guests by adding it to every bill. This will be additional to the room rate. The charge should be made in respect of every room/unit occupied, regardless of the trip purpose.

Please note that public house premises, self-catering premises and guest houses are excluded.

Collection of the Chester Visitor Charge

Each property will be responsible for collecting the £2plus VAT per room visitor charge from their guests. Properties will be encouraged to identify the Visitor Charge as separate from the property’s other charges, in a manner similar to the city bed tax which is common throughout Europe.

Properties will be responsible for explaining the inclusion of the Chester Visitor Charge within their booking terms and conditions, and through third party booking sites. The ABID will supply materials to enable property staff to handle queries.

Any surplus visitor charge collected over and above that billed will be kept by the hotel. These amounts will be governed by business’s own performance and the discounts against the monthly STR averages identified earlier in the business plan.

The ABID will see a small visitor charge called a ‘Chester Visitor Charge of £2 plus VAT per room/unit, per night, from visitors staying overnight.

9. Levy payment, calculation and appeals

The ABID will commence on 1st January 2025 (173 days after the proposed date of declaration), lasting for a period of five years to 31st December 2029. The ratepayer of each hereditament – i.e. premises liable for the charge – will be charged a Levy based on an average occupancy rate for the area, as provided by STR.

The ABID Levy will be charged in arrears – so, for example, the first charge will be in April 2025, for the period 1st January 2025 to 31st March 2025. The mechanism for establishing and paying the Levy for each property is set out on page 29. CW&C Council will be responsible for its collection.

Only hotels, aparthotels, travel lodges or serviced apartments available for private, paid overnight booking (excluding public house premises, self-catering premises and guest houses as part of the city’s visitor offer) with a rateable value of £18,000 or more and within the ABID area will (i) be liable for payment of the Levy and (ii) be entitled to participate in the ballot. The number of properties liable for the Levy is 27 at present. If the ratepayer changes during any three-month period, the charge will be apportioned accordingly.

A process of appeal against the calculation of any quarterly charge that might be disputed is set out below. New properties meeting the criteria and within the ABID boundary as defined in this document will be charged from the date on which the property is included on the ratings list.

Calculation of the Levy

STR data will be used to obtain the required occupancy data for each given period. A ‘Chester Average’ STR figure will be used as the basis for levy calculations. An independent audit of rooms/units will be undertaken periodically to support this process.

The Monthly Multiplier will be calculated using STR occupancy data as follows:

(Numbers of rooms/units available per night x number of nights per month) x (STR published ‘Chester Average’ occupancy rate for each month minus any reduction)

A reduction allows for pre-bookings and larger scale bookings throughout the period of the ABID, as follows:

• For the first 12-month period (1st January 2025 to 31st December 2025) the STR rate will be reduced by 15%.

• For the second 12-month period (1st January 2026 to 31st December 2026) the STR rate will be reduced by 10%.

• For the third, fourth and fifth 12-month periods (1st January 2027 to 31st December 2029) the STR rate will be reduced by 5%.

Example:

(a x b) x (c – d) = Monthly Multiplier

(a) Numbers of rooms/units available per night

(b) The number of nights per month

(c) The STR-published ‘Chester Average’ occupancy rate for each month

(d) The reduction to allow for potential noncollection/prior or group bookings etc.

The Monthly Multiplier for a hypothetical hotel with 100 bedrooms in the third year, January 2027, when the ‘Chester Average’ occupancy rate was 70% would be calculated as:

(100 rooms x 31 nights) x (70% - 5%) = 2,015 (the Monthly Multiplier)

The ABID Levy for each month is then calculated by multiplying the Monthly Multiplier by a Levy rate which is: £2.

Based on this, the ABID Levy due from the same hypothetical hotel with 100 bedrooms in January 2027, when the ‘Chester Average’ occupancy rate was 70%, would be calculated as follows:

ABID Levy = Monthly Multiplier x Levy Rate

Therefore:

ABID Levy = 2,015 x £2.00 = £4,030

For any ratepayer also liable for payment of a levy to the Chester City Centre (CH1) BID, the quarterly ABID Levy charge will be discounted by one-quarter of the levy charged by CH1 for that financial year. (Note: the CH1 levy would be due on 1st September annually and the financial year is 1st September to 31st August). This further reduction in ABID Levy due to any such hereditament is dependent upon the CH1 Levy having been paid in full.

Payment of the Levy

The Levy will be charged quarterly in arrears to each individual property, with the first payment due after 1st April 2025 to cover the Q1 period 1st January to 31 March 2025. Each demand will be based on the previous quarter’s STR data. Demands will be raised by CW&C Council, and an operating agreement will be agreed with the new Chester ABID.

Subject to the criteria stated above and the ABID boundary as defined in this document, the ABID Levy is a statutorily compulsory payment regardless of whether the business exercised its vote, voted against the ABID, and/or fails to pass on the Charge to the guest.

Appeals

The appeals process only relates to the calculation of the levy bill, not the demand itself. Upon receipt of a quarterly demand, a ratepayer will have 15 days to appeal the calculation of the amount, based on the difference in inventory of ‘available rooms/ units’ due to ‘out of order’ rooms/units. A report from the property’s PMS system may be used as evidence of ‘out of order’ as long as the date and number of rooms/units out of order are visible and clear. For example, if a property can demonstrate (through STR or other objective audited data) under performance compared to the charged occupancy rate, an adjustment may be made to the demand. Any such appeal needs to be made in writing to Cheshire West & Chester Council who will handle the matter according to policies and operating procedures agreed by the authority and the Chester ABID. Each appellant will be advised of the process to follow.

10. Governance and accountability

Chester Accommodation BID Limited (registered in England; registered number 15577483) will be the ABID body. This is a not-for-profit organisation, limited by guarantee, and will be a subsidiary of the CH1 Chester BID Company Ltd.

The ABID will have its own Board responsible for overseeing the strategic direction of the ABID, ensuring projects outlined in the ABID Proposal are delivered within budget to meet the objectives of the Levy-paying businesses, and ensuring the ABID performs its role effectively and fairly. The ABID Board’s Terms of Reference are included in Appendix 3.

The ABID Board will establish an Audit and Finance committee and may form subgroups to advise on delivery matters such as marketing, events, etc. Any sub-group will report to the Board and will be chaired by a member of the Board. Provided that the ABID is meeting its overall objectives, and subject

to consultation, the Board shall have the ability to vary service delivery and expenditure allocation according to the changing demands of Levy payers. Any changes to the ABID boundary or to the methodology relating to the Levy may require an Alteration Ballot.

Prior to the ABID Company becoming operational, additional levy-paying directors will be appointed. The Board shall then appoint a Chair and any additional directors from external stakeholder organisations. The number of levy-paying directors shall always be the majority.

Chester ABID Governance Organogram

CH1 Chester BID Company Ltd (Parent body with legal responsibility)

The ABID will operate a small executive team employed through the BID Company to manage day to day activity and give levy payers a dedicated point of contact. Rather than seek to deliver projects itself, the ABID will aim to commission established organisations and suppliers to be its delivery partners were appropriate.

The ABID Company will file annual accounts with Companies House. An annual report on activities, including finances, will be published along with frequent consultations to rate levels of satisfaction. An annual meeting for Levy payers will be held, and regular communications on delivery activity and plans will be distributed to all Levy-paying members.

The Company shall meet quarterly with CW&C Council, as the billing authority, to monitor Levy collection and financial management issues. The Services to be provided by the ABID shall be in addition to any Council baseline services, including those funded (in part or in whole) by business rates. The Council has agreed that they will not use the availability of BID levy to disproportionately reduce the statutory baseline services within the ABID area compared to any reductions applied elsewhere.

11. The voting / ballot procedure and timeline

Voting

Each property or hereditament subject to the Levy will be entitled to one vote in respect of the ABID Proposal. Those responsible for properties or hereditaments to be subject to the ABID will be sent a ballot paper. The result will be declared as soon as practically possible after the ballot has closed. For the Proposal to be successful at ballot the result will need to meet, as a minimum, two independent criteria:

(1) Of those ballots returned by the close, those voting in favour of the Proposal must exceed those voting against it; and

(2) Of those ballot papers returned by the close, the total rateable value of those properties or hereditaments which vote in favour must exceed the total rateable value of those voting against.

ABID Levy payers will be frequently consulted to shape the ABIDs priorities and assess the success of projects and initiatives delivered by the ABID.

Ballot timeline

12. Consultation and engagement

This Proposal has been shaped by a series of discussions, workshops and engagement events over the course of six months between November 2023 and May 2024, led by Destination Chester.

As part of the consultation process, all hotel accommodation and short-stay serviced apartment operators were invited to submit their suggestions and opinions to gain input into the initial proposal. In addition, property General Managers have been briefed on the ABID proposals at meetings of the CHA and the Chester CH1 meetings.

All properties have been invited to oneto-one meetings, and such briefings and consultations have been held with 18 properties. All properties in scope have been invited to participate in the online questionnaire, and to meetings to shape the process. All properties were sent a digital copy of the initial proposals in March 2024, following a workshop, with follow-up communications.

The diagram below sets out the key milestones and the main changes made following the consultation, between November 2023 and the publication of this proposal.

• One-to-one consultations with stakeholders

• Face to Face Workshop

• Online workshop

• One-to-one meetings with hoteliers

• Feedback influences additional discounts against STR average in Y1 & Y2

• Face to face workshop

• Detailed information issued to all affected hoteliers

• Further one-to-one meetings

• Distribution of online questionnaire

• Continued one-to-one meetings

• Final distribution and and analysis of online questionnaire

• Revised detailed information issued - key changes based on consultation include focus on city centre, revised boundary, additional networking capacity and attracting location filming.

Appendices

The rules of the proposed ABID are summarised below:

Appendix 1: Definitions

This document is a BID Proposal for the purposes of the Act. If approved, it will form the basis of the BID Arrangements which govern the way in which the levy will be charged and used. The following terms, used throughout this Proposal document, shall have the same meaning as provided in the Local Government Act 2003 and the Business Improvement Districts (England) Regulations 2004:

“the 2003 Act” means the Local Government Act 2003.

“the 1988 Act” means the Local Government Finance Act 1988.

“BID” means Business Improvement District (often referred to throughout this document as “ABID”).

“Ballot” means a BID Ballot under section 49(1) of the Local Government Act, 2003.

“BID Body” or “BID Company” means, the body (whether corporate or not corporate) responsible for the implementation of the arrangements: in this instance the Chester Accommodation Business Improvement District is the Chester Accommodation BID Ltd (Company Number: 15577483).

“BID Proposer” means a person who draws up BID proposals. In this case, the joint BID proposers are the Chester BID (t/a CH1), Destination Chester and Chester Hospitality Association.

“Billing Authority” means the Billing Authority as defined in Part 1 Section 1 of the Local Government Finance Act 1992 meaning the Common Council of the town or city as defined by Part XII Section 270 of the Local Government Act 1972 (here, Cheshire West and Chester Council.

“Commencement date” subject to regulation 9(12) of the Business Improvement Districts (England) Regulations 2004, means the day, pursuant to section 53 of the 2003 Act, the BID arrangements are to come into force (here, 1st January 2025, being 173 days after the date of declaration).

“Hereditament” means anything which is or is treated as being a hereditament by virtue of the provisions of or any provisions made under section 64 of the 1988 Act including any hereditament to which regulation 6 of the Non-Domestic Rating (Miscellaneous Provisions) Regulations 1989 applies but otherwise excluding any hereditament to which regulations made under section 64(3)(b) of the 1988 Act apply.

Appendix 2: ABID rules

The ballot

UK Engage, on behalf of Cheshire West and Chester Council, will send those responsible for properties or hereditaments to be subject to the ABID a ballot paper.

Each property or hereditament subject to the ABID will be entitled to one vote in respect of the ABID Proposal in a 28-day postal ballot ending on 11th July 2024. The result of the ballot is due to be declared on the following day (12th July 2024, being less than 365-days before the commencement date).

Each property or hereditament subject to the ABID levy will be entitled to one vote in respect of the ABID Proposal. Those responsible for properties or hereditaments to be subject to the ABID will be sent a ballot paper. The result will be declared as soon as practically possible after the ballot has closed. For the proposal to be successful at ballot the result will need to meet, as a minimum, two independent criteria which are:

(a) of those ballots returned by the close, those voting in favour of the proposal must exceed those voting against it; and

(b) of those ballot papers returned by the close, the total rateable value of those properties or hereditaments which vote in favour, must exceed the total rateable value of those voting against.

On this basis, if the majority of businesses voting in the ballot vote ‘yes,’ both by number and by their collective rateable value, Chester ABID will formally begin on 1st Jan 2025, and will remain in place for a 5-year term.

The levy

The Levy rate to be paid by each property or hereditament is to be calculated as £2 per room/unit occupied per night, using average occupancy data (the ‘Chester Average’) supplied by STR. Each property will be charged using the following calculation:

(Numbers of rooms/units available per night x number of nights per month) x (STR published ‘Chester Average’ occupancy rate for each month minus any reduction)

The reduction will be made to allow for pre-bookings and other variations as follows:

• For the first 12-month period (1st January 2025 to 31st December 2025) the STR rate will be reduced by 15%

• For the second 12-month period (1st January 2026 to 31st December 2026) the STR rate will be reduced by 10%

• For the third, fourth and fifth 12-month period (1st January 2027 to 31st December 2029) the STR rate will be reduced by 5%.

For any provider also liable for payment of a levy to the Chester City Centre (CH1) BID, the quarterly ABID Levy charge will be discounted by one-quarter of the levy charged by CH1 for that financial year. (Note: the CH1 levy would be due on 1st September annually and the financial year is 1st September to 31st August). This further reduction in ABID Levy due to any such hereditament is dependent upon the CH1 levy having been paid in full.

The charge will apply to all liable properties and hereditaments within the defined area, including any that may be added to the ratings list at any time after the ballot date. Newly liable premises will be charged from the date on which the hereditament is included on the ratings list.

Liability for the BID Levy will only arise in respect of hereditaments that are identifiable by the relevant billing authority (based on billing authority records, including VOA classifications) as hotels, aparthotels, travel lodges and serviced apartments available for private, paid overnight booking (excluding public house premises, self-catering premises, and guest houses) with a rateable value of £18,000 or more, and within the geographic boundary defined as the ABID Area. The number of properties or hereditaments liable for the Levy is currently 27.

The Levy will be charged quarterly in arrears. CW&C Council will be responsible for collection of the Levy.

Appeals

The appeals process only relates to the calculation of the levy bill, not the demand itself. Upon receipt of a quarterly demand, a ratepayer will have 15 days to appeal the calculation of the amount, based on the difference in inventory of ‘available rooms/units’ due to ‘out of order’ rooms/units. A report from the property’s PMS system may be used as evidence of ‘out of order’ as long as the date and number of rooms/units out of order are visible and clear.

For example, if a property can demonstrate (through STR or other objective audited data) underperformance compared to the charged occupancy rate, an adjustment may be made to the demand. Any such appeal needs to be made in writing to Cheshire West & Chester Council who will handle the matter according to policies and operating procedures agreed by the authority and the Chester ABID. Each appellant will be advised of the process to follow.

Governance and accountability

Chester Accommodation BID Limited (Registered in England, registered number 15577483) will be the BID Body. It is a not-for-profit organisation, limited by guarantee, and will be a subsidiary of the CH1 Chester BID Company Ltd. It will file annual accounts and arrange periodic consultations and meetings with levy payers.

Prior to the ABID Company becoming operational, additional levy-paying directors will be appointed. The Board shall then appoint a Chair and any additional directors from external stakeholder organisations. The number of levy-paying directors shall always be the majority.

The ABID Board will establish an Audit and Finance committee and may form sub-groups to advise on delivery matters such as marketing, events, etc. Any sub-group will report to the Board and will be chaired by a member of the Board. Provided that the ABID is meeting its overall objectives, and subject to consultation, the Board shall have the ability to vary service delivery and expenditure allocation according to the changing demands of Levy payers. Any changes to the ABID boundary or to the methodology relating to the Levy may require an Alteration Ballot.

Finances

A cautious approach has been adopted to budgeting. A Levy collection rate of 90% has been assumed, together with an average occupancy rate of 73%. This leads to average annual Levy available to be spent by the ABID of £1,005,695.

Alteration policy

Provided that the BID is meeting its overall objectives, the board shall have the ability to vary service delivery and expenditure allocation according to the changing demands of levy payers. Any change to the BID boundary or to the methodology relating to calculation of the levy rate may require an Alteration Ballot.

Monitoring and reporting

The Company shall meet with the Council, as the Billing Authority, quarterly to monitor service delivery, levy collection and financial management issues.

The BID will file annual accounts with Companies House. An annual report on activities, including finances, will be published. An annual meeting for levy payers will be held. An Operating Agreement will be entered into with Cheshire West and Chester Council to cover billing arrangements. Notification of the intention to hold a ballot was sent to the Secretary of State on 19th Feb 2024, updated on 9th April to reflect amended ballot timelines.

No non-domestic ratepayer will receive relief from the BID levy. A hereditament that wishes to appeal against the levy may do so through the process set out in this document.

Baseline statement

The Services to be provided by the ABID shall be in addition to any Council baseline services, including those funded (in part or in whole) by the Council. The Council has agreed that they will not use the availability of BID levy to disproportionately reduce the statutory baseline services within the ABID area compared to any reductions applied elsewhere.

Discretionary services which fall into the remit of the ABID are covered by service contracts and will be reviewed within the timeframe of the ABID.

Appendix 3. ABID board proposed terms of reference

The ABID Board’s purpose is to oversee the strategic direction of the ABID, ensuring projects outlined in the ABID Proposal are delivered within budget to meet the objectives of the Levy-paying businesses, and ensuring the ABID performs its role effectively and fairly.

Responsibilities of the ABID Board are as follows:

• Oversee the strategic direction of the ABID

• Ensure the ABID proposal is delivered within budget to meet the needs of the ABID Levy paying businesses

• Ensure that ABID levies are collected as set out in the ABID Proposal

• Ensure that the projects in the ABID Proposal are delivered effectively

• Monitor progress and report regularly to Levy payers, voluntary contributors and other stakeholders

• Elect a Chairperson and Sub-group Chairpersons (when required) from among their number

• Ensure the ABID Company meets all its financial and legal responsibilities

• Have the final decision on any challenge made by any participating business to the calculation of their invoice (refer to Appeals Process in Section 9).

FAQs

How is the average occupancy rate calculated?

STR will provide the data for overall occupancy within an agreed area.

If the ballot is successful, do I need to pay?

Yes – if most vote in favour, everyone will be charged.

If I don’t impose the Visitor Charge, can I avoid paying?

No, you will be charged anyway.

How is the visitor charged the £2 plus VAT?

At the desk on exit, online or via online travel agents (OTA commission may apply in addition).

Is there an appeal process?

Yes, but only in exceptional circumstances where a charge to the visitor was not possible (e.g. the premises was forcibly closed, etc.).

Are new hotels charged if they open after the ballot?

Yes, assuming they are subject to the Levy rules (e.g. over the RV threshold, etc.).

If I receive more Visitor Charge than I owe, what happens?

You keep it.

Will there be a discount to allow for any anomalies, such as prebookings?

For pre-bookings, contracts and largerscale bookings in the first two years, higher reductions have been adopted. In future years, a smaller reduction applies to allow for occupancy variations and non-collection as follows:

• For the first 12-month period (1st January 2025 to 31st December 2025) the STR rate will be reduced by 15%

• For the second 12-month period (1st January 2026 to 31st December 2026) the STR rate will be reduced by 10%

• For the third, fourth and fifth 12-month periods (1st January 2027 to 31st December 2029) the STR rate will be reduced by 5%.

Who sends me the bill?

Cheshire West and Chester Council.

When will I be billed?

Quarterly, in arrears, and starting April 2025 (for Q1).

ABID Proposers are:

For more information contact:

Carl Critchlow

Email: hello@chesterabid.co.uk