Mayors will soon have the authority to implement a new tourist tax for overnight stays. The government plans to empower local leaders to levy a “modest charge” on visitors staying in accommodations like hotels, bed and breakfasts, guest houses, and holiday rentals. This move mirrors similar regulations in cities such as New York, Paris, and Milan.
The initiative aims to enable mayors to raise funds for local projects, particularly in transportation and infrastructure. Prominent figures like Andy Burnham of Greater Manchester and Sir Sadiq Khan, the Mayor of London, have expressed support for the measure. However, leaders in the hospitality industry have criticized it as a “damaging holiday tax” that will likely be transferred to consumers.
This development coincides with Rachel Reeves’ upcoming Budget announcement, where she is expected to outline tax and spending plans to address public finance challenges. Local Government Secretary Steve Reed highlighted the significance of tourists visiting England’s cities and regions, emphasizing the opportunity for mayors to allocate additional resources to local priorities for sustained growth and community investment.
Regional leaders, including Sir Sadiq, welcomed the decision, noting the positive impact on London’s economy and global reputation as a tourism and business hub. Andy Burnham also expressed pride in Greater Manchester’s appeal to millions of visitors annually, contributing significantly to the local economy and job market.
On the other hand, UKHospitality chief Kate Nicholls denounced the government’s policy shift as a burdensome tax increase that could raise costs for travelers within the UK. She warned of potential negative implications for consumers and the broader hospitality sector, projecting a substantial impact on travel expenses and inflation rates for holidaymakers.
A consultation period on the specifics of the tourist tax implementation will run until February 18.