Visitors to English cities and regions could face a new tourist tax under plans giving mayors the power to impose a charge on stays in hotels, bed and breakfasts, guest houses and holiday lets. The levy, described as “modest,” would be used to fund local infrastructure, transport and visitor economy projects.
The proposal has been backed by regional leaders including London Mayor Sir Sadiq Khan and Greater Manchester Mayor Andy Burnham. Sir Sadiq 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.”
Andy Burnham added: “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, like keeping our streets clean and enhancing our public transport system through later running buses and trams.”
Local Government Secretary Steve Reed said the tax would allow mayors to “harness” tourism revenue for local priorities and investment. Officials noted that similar tourist taxes operate in international cities such as New York, Paris and Milan, and research indicates that reasonable fees have minimal impact on visitor numbers.
The plan has faced opposition from some quarters. Tees Valley Mayor Lord Houchen said: “I won’t be using this power. There will be no tourist tax in Teesside, Darlington and Hartlepool for as long as I’m mayor. Thanks, but no thanks.”
Kate Nicholls, chairwoman of UKHospitality, warned that the tax could cost the public up to £518 million. She said: “Make no mistake – this cost will be passed directly on to consumers, drive inflation and undermine the Government’s aim to reduce the cost of living.”
Westminster City Council leader Adam Hug called for any revenue to be shared with local councils rather than kept solely by mayors, stressing that the funds should support essential services to maintain economic growth.
A public consultation on the proposals is open until February 18, ahead of the upcoming Budget, and will consider issues including whether there should be a cap on the levy.
