Visitors to English cities and regions will soon need to pay a tourist tax under plans announced by the government this month which allows mayors to add an extra 5 percent charge to overnight stays. Other European countries that have an overnight levy, otherwise known as a tourist tax, include France, Italy, Spain, and Greece, amongst others. In the English case, the charge will be uncapped so local authorities can decide how much they want to levy.  

Mayor of London Sadiq Khan was positive about the prospect of an overnight visitor levy to “raise and invest funding locally”. He said: “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.” 

However, this comes at a time when UK holiday prices are already high, causing backlash from leaders in the hospitality sector that this move will make England a less competitive location for tourists. The Mace approached leaders in this industry to see what they think.  

Robert Richardson FIH MI Hon Doc, Chief Executive, Institute of Hospitality 

“As a former hotelier, I understand the principle behind a visitor levy. Where money raised from tourism is transparently ring-fenced and reinvested into the places people are visiting, supporting infrastructure, the visitor experience and the long-term attractiveness of a destination, there is a reasonable conversation to be had. 

“However, timing and context matter. Hospitality businesses are already operating under considerable cost and tax pressures, alongside uncertainty ahead of the Budget and continuing concerns around energy and other operating costs. Introducing another charge connected to our sector at this point risks adding further pressure to businesses and consumers alike. 

“This is less about opposing the principle of a visitor levy and more about whether this is the right tax at the right time. At present, I am not convinced that it is”

“For me, therefore, this is less about opposing the principle of a visitor levy and more about whether this is the right tax at the right time. At present, I am not convinced that it is. 

“The Institute of Hospitality is a professional development body, rather than a lobbying organisation, and our focus remains firmly on supporting the people who make hospitality successful. We want to work constructively with Government to ensure that hospitality is increasingly understood and recognised as the skilled, professional career that it is. 

“As these proposals develop, I hope Government and local leaders will continue to engage closely with hospitality professionals and employers, and ensure that any revenue raised is demonstrably reinvested in strengthening the visitor economy and the destinations upon which it depends.”

Allen Simpson, Chief Executive of UKHospitality 

“The millions of families who will be forced to pay significantly more for their holiday will hardly be comforted by their money going to prop up local government, when they’re struggling to make ends meet. 

“The 33,000 people who could lose their jobs as a result of this tax, during an employment crisis, will be rightly furious. 

“In a week when the Government has talked about growth, cutting red tape, getting people back into work and supporting hospitality, it is set to announce yet another tax that will do the absolute opposite. 

“Give Mayors one tax-raising power on one sector and they will pull that lever until it snaps. You just need to look at the long list of Mayors already lining up to do just that. 

“The Government claims this tax is normal. It’s not. There are scant examples of a destination with our 20% level of VAT and a holiday tax, for a reason. If it wants to use that argument, it should practice what it preaches and lower hospitality VAT to 10%, in line with Europe. 

“It’s now more important than ever that the Budget reduces hospitality’s costs, given the holiday tax is set to increase them once again. Tinkering around the edges is not enough. There has to be a substantial reduction in hospitality’s tax burden next month. Cut VAT, fix business rates and reduce NICs.” 

Chris Webb, MP for Blackpool South and chair of the All-Party Parliamentary Group (APPG) for Hospitality and Tourism 

“If the government chooses to proceed with the levy, it must be designed with fairness, consistency and genuine engagement with the industry. 

“It must be designed with fairness, consistency and genuine engagement with the industry”

“These findings set out how any future levy should work for communities, visitors and businesses alike, while ensuring the essential safeguards are in place to protect jobs and economic growth. I hope the government will give serious consideration to the recommendations in this report and learn from its findings.” 

The APPG inquiry involved evidence sessions and written submissions from stakeholders including UKHospitality, the Confederation of British Industry, BusinessLDN, UKinbound, the Local Government Association, the Tourism Alliance and major tourism businesses such as Merlin Entertainments, Parkdean Resorts and Forge Holiday Group.