Regional authorities in England are preparing for new powers that would allow them to introduce a tourist tax on overnight stays, creating uncertainty for hotels, guesthouses and short-term rental operators.
The proposed visitor levy would apply to a wide range of accommodation and could add a small surcharge to room nights across major destinations.
What the proposed visitor levy could mean for accommodation providers
The government’s plan would give elected mayors the authority to introduce a local levy on overnight stays, similar to those already used in many international tourist cities. The rate, structure and timing would be determined locally, following consultation.
Hoteliers and holiday-let operators are monitoring the process closely, as decisions will vary from region to region.
Other parts of the UK have already moved ahead with their own schemes. Edinburgh will introduce a 5% charge on stays from 2026, with Glasgow following a year later.
Liverpool and Manchester currently operate smaller nightly fees through business-improvement-district arrangements. The new proposals could bring England more in line with these existing models.
Why cities are considering a tourist tax
Local authorities argue that a visitor levy would help fund services used heavily by tourists, such as public transport, street maintenance and cultural programmes.
Supporters say the revenue could strengthen city infrastructure and improve the visitor experience, particularly in destinations with high footfall.
Proponents also note that similar charges are common across Europe, making the UK one of the few major markets without a widespread visitor tax.
Introducing a modest levy, they argue, could help cities manage tourism sustainably and generate dedicated funding for local priorities.
Implications for the hotel sector and booking behaviour
For hotels and other accommodation providers, the main concern is how a levy would be implemented. Operators may need to update booking systems, adjust pricing displays and ensure guests understand whether the charge is included in the rate or added at check-in.
Industry groups have warned that even a modest surcharge could affect price-sensitive travellers, potentially influencing destination choice.
Hotels in cities that adopt the tax earlier or at higher rates may need to revise occupancy forecasts and consider how the change fits into broader pricing strategies.
Key issues the sector is watching
As councils begin formal discussions, hotel operators are seeking clarity on several points: whether the levy will be charged per person or per room; which types of accommodation will be included; how the funds will be used; and how quickly the change will take effect.
For international hotel groups with UK properties, the coming months will be important.
The introduction of tourist taxes in multiple English cities could reshape local competitiveness, influence future investment decisions and affect how operators position their properties in an increasingly price-sensitive global market.
