A plan to tax tourists for hotels stays in London was condemned by a leading travel trade body even before being officially announced.

London mayor Sadiq Khan is expected to propose a bed tax today as part of a devolution settlement for the capital.

But the move was criticised last night by the British Hospitality Association as an “absolute folly”.

The expected move by Khan follows Camden council in the capital proposing a £1-a-night bed tax earlier this month for hotel stays in an attempt to offset government funding cuts.

BHA chief executive Ufi Ibrahim said: “The mayor of London’s announcement is extremely worrying to London businesses as it provides sharing platforms, such as Airbnb, with an even greater advantage over hotels in the capital because visitors not only do not have to pay VAT on the cost of their stay but also would not be eligible to pay his proposed bed tax.”

She added: “The BHA regards any bed tax as absolute folly and asks the mayor to think again.

“The introduction of a London bed tax will not only cost tourists more but harm already hard-pressed London hospitality and tourism businesses.

“Tourists in the UK already pay the most tax in Europe and the World Economic Forum currently ranks the UK 140 out of 141 countries in terms of tourism tax competitiveness.”

She argued that a bed tax, however small, will discourage guests from staying overnight and reduce the amount they spend in the wider London economy, impacting shops and restaurants as well as hotels.

“Local bed taxes will make it even harder for British businesses to compete,” Ibrahim warned.

“The UK’s rate of tourism VAT is already twice the European average and, although some European countries have local tourism taxes, they all enjoy a lower rate of tourism VAT so that any negative impact is offset.”