Visitors to English cities and regions may soon face an additional charge on their hotel bills, as the government grants mayors the power to introduce a local tourist tax. The levy, which would apply to all forms of paid overnight accommodation, is expected to be capped at 5% of the room rate, though no formal ceiling has been set.
The move aligns England with a growing trend across Europe, where cities from Amsterdam to Venice have adopted similar charges to manage tourism and fund local infrastructure. Edinburgh, the Scottish capital, introduced its own overnight fee in July, and Manchester became the first English city to do so in 2023. Yet the announcement has drawn sharp criticism from the hospitality sector, which argues that the tax will discourage visitors and add strain to an industry already grappling with higher taxes and labour shortages.
How the levy would work
Under the new plans, mayors in England will have the discretion to set a percentage charge on the total cost of a visitor's overnight stay. The fee would apply to hotels, holiday rentals, bed and breakfasts, and guesthouses, regardless of the guest's nationality or the purpose of their trip. Several mayors, including those in London, have already pledged to keep the charge at or below 5%.
The decision on whether to introduce the tax rests with each mayor. Some have already voiced opposition, including representatives from the seaside resort of Skegness and the town of Hartlepool. The government expects the first levies to be in place before the end of 2029.
Industry warnings and economic impact
Trade body UKHospitality has estimated that a 5% levy could lead to 11.9 million fewer visitor nights and a £1.8 billion (€2.1 billion) drop in tourism spending by 2030, potentially costing nearly 33,000 jobs. The World Travel & Tourism Council (WTTC) has also cautioned that the fee could make the UK less competitive as a global destination.
Research published by the WTTC earlier this year found that 29% of travellers from the UK's largest international source markets – the US, France, and Germany – would consider an alternative destination or skip the UK altogether if a €10 visitor tax were introduced. Among UK residents, 39% said they would holiday elsewhere or stay home if faced with a £10 levy.
Opponents argue that the tax could create a patchwork of destinations, with tourists choosing to avoid areas that impose the fee in favour of those that do not. This concern is particularly acute in a country where tourism is a major economic driver, and where Spain's record visitor numbers show how competitive the European market has become.
Supporters, however, point to the success of similar schemes elsewhere in Europe. The EU's recent housing plan to regulate short-term lets in tourist hotspots reflects a broader push to manage the impact of mass tourism. In Edinburgh, the 5% fee is capped at five consecutive nights and is charged year-round, providing a steady revenue stream for local services.
Manchester's levy, introduced in 2023, is set at £1 (€1.14) per room, per night, and applies to hotels and short-stay serviced apartments in the city centre with an annual rent value of £75,000 (€85,000) or more. This targeted approach has been seen as a model for other cities, though its impact on visitor numbers remains unclear.
As the debate continues, the government has stressed that the levy is optional and that mayors will be accountable to their local electorates. For now, travellers to England should be prepared for the possibility of an extra line on their hotel bill in the coming years.
