Visitor levies – often called “tourist taxes” – are moving closer to reality across the UK, with England now consulting on giving mayors the power to charge overnight guests. These proposals could affect hotels, B&Bs, tent pitches for short‑term rentals, and other paid accommodation, making them highly relevant for clients in the tourism and hospitality sectors.
What are the Proposed UK Visitor Levies?
Visitor levies are small charges added to paid overnight stays, typically per person or per room, per night. Key features emerging from current proposals include:
- Local authority discretion: Mayoral Strategic Authorities in England would be empowered to introduce a levy on overnight stays.
- Scope of accommodation: Hotels, B&Bs, guesthouses, short‑term rentals (e.g., Airbnb), hostels, campsites, and temporary event accommodation are all being considered.
- Alignment with devolved nations: Scotland and Wales already have legislation enabling local visitor levies, and some English cities (Manchester, Liverpool) have implemented workarounds via business improvement districts.
- Implementation timeline: Consultations in England run until February 2026, with some local proposals (e.g., Cardiff) targeting 2027 for rollout.
- Consistency: Whilst it has been labelled a ‘Tourist Tax’. The rate will also apply to Business and leisure travellers alike.
Why is the Levy Being Proposed?
1. Funding Local Services and Infrastructure
The UK welcomed over 120million overnight visitors in 2024. Visitor levies would help councils fund tourism infrastructure, public services, and local improvements that support visitor demand.
2. Boosting Regional Economic Growth
The government frames the levy as part of a broader strategy to empower local leaders to invest in transport, housing, and economic development.
3. Fair Contribution from Visitors
With millions of annual visitors in cities like Cardiff and York, councils argue that a modest levy ensures tourists contribute to the upkeep of the destinations they enjoy.
4. International Alignment
Most European cities already charge tourist taxes; the UK is positioning itself to follow a similar model. Evidence from European cities suggests that small, transparent levies rarely reduce visitor numbers. Research cited by the UK Government shows that reasonable fees have minimal impact on tourism.
What are some of the concerns for the Tourism sector?
1. Impact on Tourism Demand
Critics argue that even a small charge could deter visitors—especially in price‑sensitive regions or cities already struggling with perceptions of safety or competitiveness.
2. Burden on Accommodation Providers
Hoteliers and independent operators worry about administrative complexity, increased costs, and reduced competitiveness compared with areas without a levy. For example, hotel operators in the Midlands warn the levy could negatively affect accommodation and leisure attractions.
3. Uncertainty Over Use of Funds
Local businesses and councillors have expressed concern that funds raised may not stay local or be used transparently.
5. Proportionality – a tent pitch can be a cost effective holiday choice. But adding £1 per person per night, drives up the cost of the holiday making domestic holidays more expensive. In turn driving up domestic inflation.
6. UK VAT – The visitor levy is on top of the VAT levels attributed to hospitality services. VAT in the UK is already the most expensive in Europe for Hospitality. The UK has the highest VAT for Hospitality in Europe at 20%, with Germany, France and Spain at 10% or under.
What This Means for your business?
For clients in hospitality, property, tourism, the proposed levies could have several implications:
Financial Planning & Pricing Strategy
- Accommodation providers may need to adjust pricing models to incorporate the levy.
- Businesses should consider how the levy affects competitiveness and occupancy forecasts.
Systems & Compliance
- Accounting systems may require updates to track, collect, and remit levies.
- Clear processes will be needed for reporting and reconciliation.
Contractual Considerations
- Short‑term rental hosts and hotel operators may need to update booking terms.
Visitor levies are likely to become a standard feature of the UK tourism landscape. While they offer potential benefits for local investment, they also introduce new financial and administrative considerations for businesses.
We are members of Trade organisations: UK Inbound, British Educational Travel Association and UK Hospitality. Who are all working with Government to represent their members views.
