England’s mayors granted power to charge tourism levy

The government has granted England’s mayors the power to charge a new levy on overnight stays.  

 

The funds raised would be invested in transport, infrastructure and the visitor economy, according to the ministry of housing, communities and local government.

 

“The fee would apply to visitors’ overnight trips, and it would be up to mayors and other local leaders to introduce a modest charge if it’s right for their area,” said the ministry’s announcement. 

 

“The move would ensure UK mayors have the same powers as their counterparts in cities like New York, Paris and Milan, where charges on short-term trips are already commonplace.”

 

But Abta public affairs director Luke Petherbridge said: “Abta has consistently raised concerns about the cumulative impact of increasing taxes and charges on tourists and tourism businesses, with the UK already applying much higher rates of VAT than many countries and levying the highest air departure tax in the world.

 

“Against that backdrop, it’s hard to see how a further tax will not simply worsen the UK’s situation when it comes to competitiveness. 

 

“We will be engaging with industry partners to respond to the consultation in the coming weeks.”

 

UKinbound chief executive Joss Croft said: "The announcement that regional mayors could introduce a levy on overnight stays will cause serious concern across England’s visitor economy. 

 

"International visitors to the UK already face a stack of charges including visa or ETA fees, some of the highest Air Passenger Duty rates in the world, and 20% VAT on hospitality, charges which weaken the UK’s appeal as a destination to visit. 

 

"Experience from Scotland shows that percentage-based levies create major administrative burdens for accommodation providers, intermediaries and local authorities, while delivering uncertain revenue and significant set-up costs.

 

"If government proceeds, any scheme must be simple, fixed-rate and low-cost, protect small businesses, administered by local authorities rather than individual operators, and all revenue must be ring-fenced for reinvestment directly into the visitor economy. A full economic impact assessment is essential before any powers are introduced to avoid untended consequences and further damage to our visitor economy.

 

"We urge the UK government to work closely with industry to avoid measures that could make the UK less competitive, less attractive to international visitors, and put jobs and regional growth at risk."

 

Ed Bignold, managing director and global co-lead for travel, hospitality & leisure at management consultancy Alvarez & Marsal, said: “There is plenty of precedent for tourist levies across Europe and beyond, and in most markets the cost has ultimately been passed on to guests. 

 

“The difference this time is timing. When other countries introduced similar measures, operators were working in an environment where they could more easily pass through rising inflationary costs. 

 

"That is proving much harder now, with margins already under strain and consumers increasingly price sensitive. History, in this case, may not be a good indicator of the future impact.”

 

Housing secretary Steve Reed said: “Tourists travel from near and far to visit England’s brilliant cities and regions. 

 

“We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.”

 

The statement said England attracts more than 130 million overnight visits each year – and noted that research shows “reasonable” fees have “minimal impact” on visitor numbers.  

 

Under the plans, any new levy would apply to visitors at accommodation providers including hotels, holiday lets, bed-and-breakfast accommodation and guesthouses.  

 

Mayor of London Sadiq Khan said: “Giving Mayors the powers to raise a tourist levy is great news for London.

 

“The extra funding will directly support London’s economy, and help cement our reputation as a global tourism and business destination.”

 

Steve Rotheram, mayor of Liverpool City Region, noted: “Cities like Barcelona and Paris raise tens of millions each year through similar schemes – money that goes straight back into improving the visitor experience and supporting the local people who keep those destinations thriving.

 

“Our visitor economy is worth more than £6 billion a year and supports over 55,000 local jobs. A modest levy is money that would stay local and be reinvested in the things that make our region stand out.”

 

Mayor of Greater Manchester Andy Burnham also welcomed the news, saying: “I’m proud that nearly two million people from all over the world choose to visit Greater Manchester every year.

 

“The money they spend contributes about £9 billion annually to our economy, supporting over 100,000 jobs. The levy will allow us to invest in the infrastructure these visitors need.”

 

Businesses, communities and others with an interest in the measure can have their say on how it should work, with a consultation running until February 18.