Key facts
- UKHospitality estimates a 5% tourist tax in England could lead to 12 million fewer visits and 33,000 job losses.
- Manchester's £1 per night tourist tax has raised £10.5 million in three years.
- Edinburgh introduced a 5% tourist tax on July 24, with industry groups saying it's too early to assess its impact.
- A 2024 study found no evidence that tourist taxes deter visitors.
- The Balearic Islands have funded €263 million in projects since 2016 via a tourism tax.
Despite concerns from UK hospitality industry bodies about potential visitor deterrence, evidence from various European destinations suggests that tourist taxes do not significantly impact visitor numbers and can be a lucrative source of revenue for local projects.
UKHospitality estimates that a 5% tax on overnight stays in England could lead to 12 million fewer visits and 33,000 job losses, adding pressure to an industry already facing increased costs. Businesses in areas like the Lake District and Yorkshire Dales are worried that visitors might choose levy-free regions instead. However, some mayors, particularly from Reform UK and the Conservative party, have opposed such proposals.
Cities like Amsterdam, Barcelona, and Venice have implemented tourist taxes to combat over-tourism, but their visitor numbers have continued to rise over the past decade. Manchester was the first UK city to introduce an overnight visitor levy in April 2023, charging £1 per room per night. A study published in Tourism Management in 2025 found this tax had no significant impact on hotel occupancy. In contrast to national trade bodies, Manchester's hospitality businesses supported the levy through a business improvement district, raising £10.5 million in its first three years for cultural projects.
Liverpool introduced a £2-a-night charge last June, generating over £2 million for sports, culture, and conferencing projects. Scotland already allows local overnight levies, and Wales will follow next April. Edinburgh implemented a 5% tourist tax on July 24, with Allen Simpson of UKHospitality claiming it was already having damaging effects. However, the Edinburgh Tourism Action Group stated it was too early to assess the impact, noting that many cities with similar schemes, including Manchester, have not seen a decline in visitor numbers.
A 2024 study by Bangor University found no evidence that tourist taxes deter visitors, noting that by 2019, 125 destinations and 26 countries in Europe had introduced such charges, primarily funding public projects. The Balearic Islands, for example, have funded €263 million in projects since 2016 through their tourism tax. Zoë Billingham of IPPR North highlighted that local businesses in Manchester and Liverpool led the charge for these taxes, and Henri Murison of Northern Powerhouse Partnership believes tourists are unlikely to be deterred by small additional charges.