England’s mayors to be given power to introduce tourist tax
English Mayors Set for New Powers Over Overnight Visitor Levies
Ninoda.com – People booking overnight accommodation in parts of England could face an additional local charge under plans expected to give regional mayors the ability to create visitor levies. The policy would allow local leaders to raise money from stays in hotels, short-term lets and other accommodation, with the proceeds intended for investment in the areas receiving visitors.
The proposals are due to be discussed when Housing Secretary Angela Rayner meets English mayors on Thursday. Rather than imposing one national rate, the approach would leave decisions on whether to introduce a charge, and how revenue should be used, with local leaders and voters.
“It will be up to local leaders and local voters” in England “to decide what is right for their area.”
The planned measure is known as the Overnight Visitor Levy. It was included in the King’s Speech in May and follows an idea first raised by Sir Keir Starmer’s government in November. Sir Keir had intended to bring forward legislation before Andy Burnham replaced him as prime minister, although the relevant bill has not yet been introduced.
A percentage charge rather than a standard fee
Under the model being considered, the levy would be calculated as a proportion of the accommodation price. That differs from a single fixed payment per night and means visitors in lower-cost rooms would pay less than those choosing more expensive options. Ministers believe this structure could help avoid placing the same burden on budget breaks as on premium stays.
There would theoretically be no maximum rate set nationally. However, ministers are understood to expect that mayors would be cautious about making overnight trips prohibitively costly. The effect on a visitor’s bill would therefore depend on the location, the local rate and the original price of the booking.
For travellers, the change would mean that an overnight stay in England may cost more in places where elected leaders decide to use the new powers. A family booking several nights could see the charge accumulate, while a short visit in a low-priced room would produce a smaller additional amount under a percentage-based system.
Where the money could go
Supporters of visitor levies argue that destinations facing high levels of tourism need additional funding to maintain services, improve public spaces and strengthen their visitor economies. Regional mayors have said extra locally controlled income could support economic growth and help finance priorities that matter in their communities.
The policy is also linked to the government’s wider devolution agenda. Downing Street has previously said local leaders would be able to explain how levy income would be invested by March 2028. This would place a strong emphasis on demonstrating a connection between the money raised from visitors and improvements in the places they visit.
London is widely expected to be among the places interested in using such a power. Mayor of London Sir Sadiq Khan supports an overnight visitor tax for the capital. Analysis published in January by Central London Forward, representing 12 central London local authorities, suggested that a 3% charge on hotel rooms and short-term lets could raise more than £350m annually.
That estimate illustrates why large visitor destinations may see the levy as an important source of funding. At the same time, the eventual outcome in London or elsewhere would depend on local political decisions, the rate chosen and the scope of accommodation included.
Existing examples in Manchester and beyond
Manchester has already introduced its own approach. When Andy Burnham was the city’s mayor, the City Visitor Charge began in April 2023. It applies a £1 charge per room for each night and is used to fund efforts designed to attract more visitors.
Overnight accommodation taxes are already common in many international destinations. New York, Amsterdam and Rome each apply charges to visitor stays, using the income to help fund local services. The English proposals would bring mayors closer to the powers already available in other parts of the UK.
In Scotland, councils can introduce a percentage-based visitor levy on overnight accommodation. Edinburgh became the first Scottish city to introduce one in July. Visitors staying in hotels, bed and breakfasts or self-catering properties pay an extra 5% on their booking cost, although the charge can apply to no more than five nights.
Glasgow is also preparing to introduce a 5% levy, scheduled to take effect from January 2027. Wales is pursuing a different design: a levy capped at £1.30 per person each night is due to begin in April next year.
Concerns over holiday costs
Hospitality businesses have raised concerns about the possible impact on customers. UK Hospitality warned earlier this year that visitor taxes could increase the price of holidays while households continue to deal with cost-of-living pressures.
The trade body has argued that extra charges could weaken the competitiveness of destinations in the UK and make domestic trips less appealing. It highlighted particular concern for families and younger people, for whom even relatively modest increases can affect travel decisions.
The debate will therefore centre on a balance between local investment and affordability. Advocates see a way for destinations to capture some revenue from the visitors who use local infrastructure and services. Critics fear that added costs could deter bookings at a time when many people are carefully managing leisure spending.
As the government sets out further detail, mayors will be watching for clarity on the legislation, the practical design of the levy and the degree of local discretion available. For travellers and accommodation providers, the most important question will be whether local leaders choose to act — and, if they do, how transparently they show the benefits created by the additional charge.
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