Reducing VAT on tourism would help create jobs in struggling seaside economies like Torbay, South West Liberal Democrats have been told.
The idea was raised at the annual South West Liberal Democrat conference in Plymouth, Devon.
Delegates have called on the party to press the government to cut the VAT rate on tourism to just 5%.
The government has said it would consider the proposals for tourism tax relief "carefully".
Supporters say any revenue loss would be offset by gains from income tax, corporation tax and reduced benefits.
"The aim is to keep people employed, because every time somebody becomes unemployed, the government pays," party activist Dennis Brewer told BBC News.
He said the Disney attraction in Paris had paid VAT at just 5.5% since it opened in the late-1980s.
"As an attraction, that gives it a fantastic advantage over places here like Living Coasts and Paignton Zoo, both of which at the moment are struggling to keep visitor numbers up.
"So if we could drop the VAT to 5% for attractions, hotels and bed nights, etc, we'd be in a much better position.
Despite brimming with hotels, bed and breakfasts and tourist attractions, unemployment rates in the Bay are relatively high.
The number of 16 to 18-year-olds not in education, employment or training has risen to more than 5% in the past year.
Tryone Summers, who has been job hunting for about 18 months, said having to rely on benefits was "not the best to live".
"You don't get paid much, but if you're working you feel confident and you feel proud of yourself," he said.
"I just don't have that at the moment."
The government has said proposals for tourism tax relief would be "considered carefully", but Culture Secretary Jeremy Hunt, said any cut in VAT was "unlikely" in the current climate.