Plans to give English mayors powers to impose tourist taxes have triggered a backlash from major hospitality businesses, which warn the policy could make family holidays more expensive and cost thousands of jobs.
The Labour government is expected to unveil the proposals on Thursday, allowing local leaders to impose a levy on overnight accommodation. The charge is understood to have no national upper limit, although government sources have indicated that most mayors are likely to set rates at a few per cent.
Hospitality industry leaders have warned that the uncapped system could cost the UK tourism and hospitality sector as much as £1.6bn. UKHospitality estimates that “33,000 people could lose their jobs as a result of this tax”.
The plans were first announced under Sir Keir Starmer, following the introduction of similar visitor levies in Scotland and Wales. Comparable charges operate in a number of European destinations, where revenues are generally used to support local services and tourism infrastructure.
Under the English proposals, local leaders would determine how the money raised is spent.
But businesses argue that imposing additional costs on accommodation risks weakening demand at a time when households remain under pressure from the cost of living, particularly in coastal resorts and other family holiday destinations.
Jon Hendry Pickup, chief executive of Butlin’s, said: “Big cities may welcome these mayoral powers, but treating every destination and hospitality business the same will leave resorts like ours to shoulder the burden.
“Giving mayors the power to impose a levy without a national upper limit takes those concerns to another level and risks making family holidays less affordable, damaging demand and making it harder for businesses to hire young people.”
Whitbread, owner of Premier Inn, also criticised the proposals.
A spokesman for the company said: “This is hugely damaging for hospitality, which is a key pillar of the UK economy and where many of our young people get their first job.
“Measures like this risk undermining the industry’s ability to invest, create jobs and support economic growth.”
The dispute reflects a wider tension over efforts to give English mayors greater control over local taxation and investment, while businesses warn that fragmented charges could raise the cost of domestic tourism.
For the hospitality industry, the central concern is that an uncapped levy could ultimately be passed directly to visitors, putting further pressure on household budgets and potentially reducing spending in the wider local economy.
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