Key facts
- A proposed 5% tourist tax in England could lead to 12 million fewer visits and 33,000 job losses.
- Mayors in England will have the power to impose a tourist tax on hotels and Airbnbs.
- Manchester's £1 per room per night levy has raised £10.5 million in three years.
- Liverpool's £2 per night charge has raised over £2 million.
- Edinburgh introduced a 5% tourist tax in July.
- Some mayors on England's east coast have opposed the proposals.
Ministers in England are set to grant mayors sweeping powers to levy taxes on holiday accommodation, a move that has sparked outrage from the hospitality industry. The proposed tax, which could be up to 5% of the cost of an overnight stay, is intended to provide a vital revenue stream for local communities facing funding crises.
However, industry bodies like UKHospitality warn that such a levy could deter visitors, leading to significant job losses and a substantial hit to the economy. They estimate that a 5% tax across England could result in 12 million fewer visits and 33,000 job losses. Regions heavily reliant on tourism, such as the Lake District, are expected to be the worst affected.
Despite these concerns, some regional leaders have welcomed the new powers, seeing them as an opportunity to fund local services, public spaces, and cultural attractions. Manchester, which introduced a £1 per room per night levy in April 2023, has raised £10.5 million in its first three years, with revenue ringfenced for cultural projects. Liverpool has also implemented a £2 per night charge, generating over £2 million for sports, culture, and conferencing projects.
While some mayors, particularly on England's east coast, have opposed the proposals, others have agreed to cap charges at 5%. Edinburgh became the first city in Scotland to introduce a 5% tourist tax in July, though it is too early to assess its full impact. Studies on similar levies in other European cities and in Manchester suggest they have had little significant impact on hotel occupancy or visitor numbers.