If you run a hotel, guesthouse, B&B, hostel or holiday let in England, there’s a proposal quietly moving through government that could directly hit your bookings, your revenue, and your staff. It’s being called a “visitor levy”, but hospitality groups have taken to coining it a ‘Holiday Tax’.
What’s Actually Been Proposed?
The government is exploring giving regional mayors the power to add a local tax on overnight stays. The money raised would go towards local transport and infrastructure. The rate would be set locally and participation would be optional for mayors, but if your region’s mayor decides to opt in, you’d have no choice but to charge it.
The Numbers
Oxford Economics, commissioned by UKHospitality, has modelled what this could actually mean for the sector.
In the worst-case scenario, a 5% levy on accommodation could wipe £1.8 billion off tourism spending by 2030 and put 33,000 jobs at risk across the industry. Even a flat £2 per person per night charge could cost 16,000 jobs and reduce tourism spending by £846 million. And here’s the kicker: the Treasury itself would likely end up £688 million worse off in overall tax receipts, because lower economic activity means lower revenues across the board.
Why This Hits Harder Than It Looks
We’re operating in an environment where guests are already watching every penny. Staycations surged after Covid, but that loyalty isn’t unconditional. If a weekend break in a UK destination suddenly costs noticeably more than an equivalent trip abroad, people will start doing the maths. And the UK already charges 20% VAT on hospitality, one of the highest rates in Europe. Piling a visitor levy on top only widens that gap with our competitors. As Allen Simpson of UKHospitality put it, this would “hike costs for Brits, make staycations more expensive and decimate tourism.” That’s not hyperbole, it’s what the modelling shows.
The ripple effects matter too. It’s not just accommodation providers who suffer when visitor numbers fall. Restaurants, attractions, local retailers, transport operators, and entire regional economies, particularly those with few alternative industries, take a hit.
What You Can Do Right Now
The government consultation on this has just closed, but the fight isn’t over. The final policy position hasn’t been confirmed yet, and industry voices still have an opportunity to shape the outcome.
Here’s what we’d urge you to do:
- Stay connected with your trade association. UKHospitality is leading the charge on this. If you’re not already engaged, now’s the time.
- Talk to your local MP. This is ultimately a political decision. The more operators who make their concerns heard directly, the better.
- Document your situation. Real stories from real businesses: jobs supported, investment made, community contribution, carry weight in policy debates.
The Bigger Picture
Nobody wants to see the communities we operate in underinvested. Better transport links and local infrastructure benefit our guests and our businesses too. But a visitor levy isn’t the right mechanism if it ends up costing more in lost economic activity than it ever raises.
