English Mayors Could Gain Power to Introduce Tourist Taxes on Overnight Stays

Mayors across England are set to gain new powers to introduce a local tourist tax on overnight stays, giving regional leaders another way to raise money for transport, infrastructure and projects designed to support tourism.

The proposed overnight visitor levy would apply to short-term, commercially let accommodation such as hotels, bed and breakfasts and other visitor accommodation. Mayors would decide whether to introduce the charge in their areas and determine how the money raised is used.

The policy forms part of the Labour government’s wider plan to devolve more financial powers from Westminster to England’s regions. Ministers argue that allowing local leaders to raise and reinvest money could help improve visitor facilities, transport networks and local economies rather than relying entirely on central government funding.

The exact design of the levy is still being developed. A government consultation considered issues including which types of accommodation would be covered, how rates would be calculated and what local authorities would need to do before introducing the charge.

Unlike a national tax, the levy would be a discretionary local power, meaning visitors would not automatically pay it everywhere in England. Mayors would have to consult on their plans before introducing a charge, with the final rate and use of the revenue determined locally.

The proposal has won support from some mayors who argue that popular destinations should be able to benefit financially from the visitors they attract. Greater Manchester Mayor Andy Burnham has previously backed such a system, while London Mayor Sadiq Khan has also supported giving local authorities greater flexibility over tourism-related revenue.

However, the hospitality industry has raised concerns about the impact on businesses and holidaymakers. UK Hospitality has warned that even a relatively modest levy could increase the cost of trips and put jobs at risk, particularly in areas that depend heavily on tourism.

Supporters counter that similar visitor levies already operate in parts of the UK and across Europe, with the revenue often used to improve the destinations attracting tourists. The government has also said evidence from existing schemes suggests modest charges have limited impact on visitor numbers.

The move represents another step in Labour’s push to give English mayors greater control over local finances. For visitors however, it could mean that the cost of staying overnight in England increasingly depends on which region they choose to visit.