Visitors staying in hotels and holiday rentals in England could soon face an additional charge under government plans to give mayors the power to introduce a tourist tax. While most city authorities welcome the measure, the hospitality industry is concerned of the drop in tourists such price hikes could produce.
The levy is expected to be no more than 5% of accommodation costs, although the proposed powers would not impose a legal cap on the rate, as Britain's The Time reports.
The charge would apply to overnight stays in hotels, Airbnb-style holiday lets, bed-and-breakfast establishments and guesthouses. Visitors would pay regardless of their nationality or reason for travel, meaning the levy would also apply to domestic travellers and business trips.
Mayors would set local rates and decide how to spend the revenue on local projects. According to The Times, the tax is unlikely to come into effect before 2028.
The proposal comes as travellers are already facing higher accommodation costs. The Times cited VisitBritain data showing that the average hotel room price reached £198 in July, up 5% from a year earlier.
Although rates are expected to remain at or below 5%, the absence of a legal cap would allow mayors to set a higher levy.
Mayors expected to receive the new powers include those in London, Liverpool, Greater Manchester, the West of England, West Yorkshire, North East England, and York and North Yorkshire.
Manchester already imposes a £1-per-room nightly visitor charge at some hotels and apartments. The new levy would replace that charge, according to The Times.
London Mayor Sadiq Khan welcomed the proposal, saying it could provide additional funding for services and facilities used by visitors.
“A well-designed, modest levy has the potential to provide an important additional source of funding to support growth, strengthen London’s offer to visitors and help us remain globally competitive. It would allow us to reinvest in the places, infrastructure, culture and experiences that make London one of the world’s greatest cities to visit, while helping manage the pressures that come with welcoming tens of millions of visitors every year,” he said.
Hospitality businesses have raised concerns about the lack of a legal cap and the potential impact on travel costs.
England’s proposal follows similar measures elsewhere in the UK. Edinburgh began charging tourists 5% of net accommodation costs in July, while Wales is scheduled to introduce a fixed nightly fee from next year.
Tourist accommodation taxes are also common across mainland Europe, with municipalities in countries including Austria, Germany, Belgium, France, Greece, Italy and Spain operating various forms of such charges.
By Nazrin Sadigova
