English mayors are set to gain powers to impose uncapped taxes on overnight visitors, under plans that could increase the cost of hotel stays and holidays for British families as well as international tourists.
The proposed “overnight visitor levy” would allow local authorities to charge people staying in hotels, holiday lets and bed and breakfasts in towns and cities that choose to introduce the tax. The levy would apply for every night of a visitor’s stay, with no national cap on the amount that could be charged.
The measure would mean British holidaymakers, business travellers and overseas visitors could all face additional charges on accommodation.
A government source said “it will be up to local leaders and local voters” in England “to decide what is right for their area”.
The policy has particular significance for Andy Burnham, who introduced Manchester’s City Visitor Charge while serving as mayor. The scheme, launched in April 2023, initially charged £1 per room per night to fund measures intended to attract visitors and support the city’s tourism economy.
The prospect of allowing councils and mayors to impose substantially higher charges has triggered opposition from the hospitality industry, which argues that the policy risks making domestic tourism more expensive at a time when households remain under pressure.
UK Hospitality warned earlier this year that a visitor tax would increase the cost of holidays as consumers continue to grapple with the cost of living.
One leading holiday company executive told the Telegraph: “There will be a jobs bloodbath at a time when they’re trying to get young people into work.”
Andrew Griffith, shadow chancellor, said the policy amounted to “propping up dodgy town hall finances on the back of even higher youth unemployment.”
The proposal was first put forward by Sir Keir Starmer in 2025 as part of a broader push towards giving local government greater control over revenue and economic policy.
London mayor Sir Sadiq Khan has backed a tourist levy, arguing that it could generate more than £350mn a year for the capital.
“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,” Khan said.
The English proposal would bring the country closer to arrangements already operating elsewhere in the UK, although the structures differ.
Scottish local authorities have powers to introduce visitor levies on overnight accommodation, calculated as a percentage of the accommodation cost. Edinburgh has introduced a 5 per cent levy, capped at five nights.
Wales is due to introduce a capped charge of £1.30 per person per night from April next year.
The debate in England is likely to centre on whether additional local taxation can generate meaningful investment in tourism and public infrastructure without undermining demand.
For the hospitality sector, the concern is that an uncapped levy could leave destinations competing not only on hotels, attractions and transport, but also on the level of tax imposed on visitors.
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