Earlier this month, the Government confirmed that: ‘Mayors and local leaders will be handed the power to introduce an Overnight Visitor Levy — a fee on overnight stays — to help maximise the benefits of tens of millions of people visiting England every year.’
According to the official announcement, it will be left to the local authorities concerned to decide the level at which they will set the levy and, indeed, whether they will charge one at all. Rather than being applied at a flat rate, it will be calculated as a percentage of the cost of an overnight stay. This, it is claimed, will have the effect of ‘shielding families from disproportionate costs for cheaper holidays’.
Food will not be included in the assessed cost and Labour local leaders collectively, including the Mayor of London, have announced a cap of 5% on what they will charge. It will be the responsibility of those providing accommodation both to calculate the cost of the levy and to apply it. Local leaders will be free to spend the money raised as they see fit, with their plans set out by March 2028. The Government expects to legislate for these changes during the current Parliamentary session.
'Given the universality of tourist taxes, it’s hard to argue that the levy is likely to put many people off travelling'
Opponents of the proposals have immediately branded the scheme a ‘tourist tax’ and have argued that it will have a chilling effect on tourism, discouraging overnight stays and putting further financial pressure on the hospitality sector. At some level, it’s hard to disagree with this analysis. In absolute terms, the levy adds to the cost of a holiday and will increase the administrative burden faced by all accommodation providers. No doubt, it will be introduced with sufficient exemptions, local variety and complications to make it confusing.
Rather like the recent increases in National Insurance and minimum wage that have already squeezed the margins of so many businesses, therefore, it feels as if it is a gift by the Government of somebody else’s money and time. All that said, given the universality of tourist taxes, it’s hard to argue that the levy is likely to put many people off travelling.
Not only are such taxes applied successfully around the world, but a levy was introduced in Edinburgh this July and is planned at Cardiff from April 2027. In Athena’s view, therefore, although the tax is unwelcome and burdensome, it is unlikely to change much in terms of the numbers of tourists visiting major attractions. What most concerns her is what we can expect in return.
If none of the money is ring-fenced for investment in heritage or culture, how does it really serve those paying it? Will the local leaders really use the money to support the things and places used by tourists or will the levy merely turn into an additional source of income that will fill an awkward financial gap in budgets? That would be a tourist tax, pure and simple.
Athena is Country Life's Cultural Crusader. She writes a column in the magazine every week.