Hospitality sector voices strong opposition
More than 200 executives in the hospitality and leisure industry have appealed to the Chancellor to halt plans for a potential tourist tax in England. Among signatories are firms such as Butlin’s, Hilton, and Travelodge, as well as the owner of Alton Towers.
In an open letter, the group stated that introducing a nightly charge could increase holiday costs by £100 or more for a typical two-week stay for a family. Business leaders warned it may lead some travellers to cut short trips, forgo domestic holidays, or choose to holiday abroad instead.
Government considers local authority levy
The government is consulting on the prospect of granting English mayors and local leaders the authority to introduce a visitor levy. Under current proposals, the charge could be set as either a fixed rate or a proportion of accommodation cost.
The final decision, including the rate, would lie with the local authorities. The official consultation on the measure is open until 18 February. Ministers have stated that any future levies should be modest and designed in accordance with practices in other European nations.
Financial and industry concerns highlighted
Industry figures cite high taxation in the UK and fear an additional levy would further damage a sector already facing significant challenges. Allen Simpson, chief executive of UK Hospitality, said, “We should be encouraging people to visit every part of our country not taxing them for doing so.
The government needs to scrap the holiday tax.” Business leaders have argued that higher costs for holidaymakers could reduce demand, causing economic harm to local areas that rely on tourism revenue.
Current visitor levy practices across the UK
The concept of visitor levies is not new in the UK but is applied differently across the nations. Scottish and Welsh councils already have legal authority to impose tourist taxes: some Scottish cities, including Edinburgh, are set to introduce such charges in the coming summer, with Edinburgh planning a 5% levy on accommodation. Wales expects to implement a visitor levy from 2027.
In England, some visitor levies already exist within certain business improvement districts (BIDs). Manchester has operated a £1 per room, per night charge since 2023, raising £2.8 million in its first year, with funds directed towards promoting tourism during quieter seasons. Liverpool introduced a similar scheme in 2025.
Political perspectives and economic context
The proposed changes reflect a broader government agenda of decentralisation in economic policy. The Secretary of State for Levelling Up, Housing and Communities has previously said that local leaders are best placed to identify investments supporting growth and attracting visitors.
A government spokesperson stated, “We are giving mayors powers to harness this and put more money into local priorities… supporting thriving communities.” However, concerns remain among some politicians. Conservative MP Andrew Griffith commented, “Businesses are already on their knees… Plans for a holiday tax will hit families and drive trade away from our towns and communities.”
International comparisons and future outlook
Tourist taxes are commonplace in major European destinations, such as Paris, Rome, and Brussels, where overnight levies are used to support city infrastructure and tourism services. The UK government maintains that any new charges should be comparable to these models, ensuring they remain competitive.
Some local councils in Scotland, including Orkney and Shetland, have chosen not to adopt visitor levies, demonstrating a diversity of approaches across the country. In Northern Ireland, no plans to introduce a visitor tax have been announced.
Final Summary
The ongoing debate over a possible tourist tax in England has triggered strong reactions from the hospitality sector, with concerns about the impact on tourism, local economies, and competitiveness. The government’s consultation continues, seeking to balance local revenue needs with industry growth and visitor affordability.
As the policy discussion develops, stakeholders await clarity on the future framework for visitor levies in England. For ongoing updates and insights on the impact of fiscal policies in the hospitality sector, the Pie app provides current and comprehensive coverage.
