A new tourism tax, an 'overnight visitor levy,' has been approved by Andy Burnham and could be implemented across England within two years, sparking significant opposition from within the holiday and tourism sectors. The Prime Minister has granted regional mayors the authority to impose this tax on stays in hotels, B&Bs, and holiday lets.
Critics argue the tax could disproportionately burden small businesses already facing financial pressures. Anthony Duffey, owner of Sunnyside Bed and Breakfast in Southport, expressed concern that the levy adds administrative and financial strain, particularly after recent requirements like Making Tax Digital. He noted a 2025 decline in domestic overnight trips to coastal areas and cited rising operational costs for energy, insurance, and food, suggesting the tax could deter domestic tourism and encourage travel abroad. Duffey stated that many small guest houses are operating under significant financial strain, and an additional tax could lead to business closures and job losses.
Official travel bodies, including the Business Travel Association (BTA), beam, and the Meetings Industry Association (MIA), have also voiced strong objections. They described the move as "short-sighted" and warned it could harm the competitiveness of British cities at a time when attracting investment and business is crucial. These organizations question whether the tax will genuinely benefit destinations and businesses and highlighted potential issues with a fragmented approach, where different regions might implement varying charges. This could complicate operations for businesses and present a disjointed image to international markets.
Concerns about the efficacy and implementation of tourism taxes are also drawn from European experiences. While intended to fund local infrastructure and services, evidence of their success is reportedly limited. In Venice, a trial day-tripper fee this summer did not prevent large visitor numbers or demonstrations. Similarly, popular Spanish destinations like Mallorca, Menorca, Formentera, and Ibiza, which have implemented varying local rates and VAT on tourists, have still contended with substantial visitor volumes and anti-tourism protests. Barcelona has introduced nightly fees of up to €15 (£13), but some critics, like Daniel Pardo Rivacoba from the Neighbourhood Assembly for Tourism Degrowth in Barcelona, described the impact as "all cosmetic."
Industry leaders suggest that for a tourism tax to be effective, there must be a clear commitment to prioritizing tourism, transparency in how revenue is reinvested, and a consistent approach across the UK. They emphasize that if the tax primarily functions as an additional business cost without direct reinvestment in making destinations more attractive, it risks diminishing the UK's competitive edge. Giles Fuchs, custodian of Burgh Island Hotel, characterized the proposed levy as "a total slap in the face," particularly following perceived mixed signals from the government regarding support for the hospitality industry.