The Government has confirmed regional mayors in England will be given powers to set their own tourism levy on overnight stays.
There had been reports last week that the Chancellor, Rachel Reeves, was planning to announce the move in her Budget speech on Wednesday (26 November).
In fact, the plan was announced on Tuesday afternoon (25 November). It gives regional mayors the power to charge for overnight stays, which the Government said ‘will put local leaders on equal footing with top tourist destinations around the world’.
The Government said mayors would be able to introduce a ‘modest charge’ on visitors’ overnight trips and the money will be used to invest in ‘transport, infrastructure and the visitor economy’.
Under the plans, any new levy would apply to visitors at accommodation providers including hotels, holiday lets, bed and breakfasts, and guesthouses.
Local leaders have welcomed the plan, but ABTA and UKinbound have warned against it. A consultation will run for the next 12 weeks, until 18 February.
ABTA Director of Public Affairs Luke Petherbridge said: “ABTA has consistently raised concerns about the cumulative impact of increasing taxes and charges on tourists and tourism businesses, with the UK already applying much higher rates of VAT than many countries and levying the highest air departure tax in the world.
“Against that backdrop, it’s hard to see how a further tax will not simply worsen the UK’s situation when it comes to competitiveness. We will be engaging with industry partners to respond to the consultation in the coming weeks.”
UKinbound CEO Joss Croft OBE added: “The announcement that regional mayors could introduce a levy on overnight stays will cause serious concern across England’s visitor economy. International visitors to the UK already face a stack of charges including visa or ETA fees, some of the highest Air Passenger Duty rates in the world, and 20% VAT on hospitality, charges which weaken the UK’s appeal as a destination to visit.
“We urge the UK Government to work closely with industry to avoid measures that could make the UK less competitive, less attractive to international visitors, and put jobs and regional growth at risk.”
UKHospitality has also warned that nightly tourist taxes will increase costs and push up prices.
