Key facts
- Mayors will be given powers to impose an uncapped "overnight visitor levy" on tourists.
- The tax will apply to each night of an overnight stay in hotels, holiday lets, and bed and breakfasts.
- Trade body UK Hospitality warned that a tax would raise holiday costs amid the cost-of-living challenges.
- Mayor of London Sir Sadiq Khan supports a tourist tax, estimating it could raise over £350 million annually for the capital.
- Edinburgh has implemented a 5% visitor levy capped at five nights.
- Wales plans to introduce a capped levy of £1.30 per person per night in April next year.
English mayors are expected to be granted the authority to implement an uncapped "overnight visitor levy" on tourists, a proposal that has ignited strong opposition from the hospitality industry. The government is set to outline these plans today, which would allow mayors to impose a fee on anyone staying in hotels, holiday lets, and bed and breakfasts within their jurisdictions, applicable to each night of their stay.
The proposed tax has drawn criticism from industry leaders, with one holiday firm executive warning of significant job losses. Shadow Chancellor Andrew Griffith also voiced concerns, suggesting the tax would burden town hall finances and potentially increase youth unemployment. However, proponents like Mayor of London Sir Sadiq Khan believe a well-designed levy could provide crucial funding for tourism growth and maintain the city's global competitiveness, estimating it could generate over £350 million annually for the capital.
Similar visitor levies are already in place or planned elsewhere. In Scotland, local authorities can introduce a visitor levy as a percentage of accommodation costs, with Edinburgh implementing a 5% charge capped at five nights. Wales is set to introduce a capped levy of £1.30 per person per night in April next year. Manchester, under Mayor Andy Burnham, previously introduced a £1 per room, per night fee in April 2023 to fund visitor attraction measures.