Visitors to English cities and regions may be subject to a new tourist tax aimed at funding local projects. Mayors are set to receive the authority to levy a "modest" charge on guests staying in hotels, B&Bs, guest houses and holiday rentals.
This measure has been advocated by regional leaders such as London Mayor Sir Sadiq Khan, Greater Manchester's Andy Burnham and West of England's Helen Godwin. However, a hospitality industry body has criticised the move as "damaging".
Local Government Secretary Steve Reed said: "Tourists travel from near and far to visit England's brilliant cities and regions. We're giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come."
Officials have indicated that this measure would align English cities with other global tourist hotspots like New York, Paris and Milan, which already impose a tourist tax. The Ministry of Housing, Communities and Local Government suggested that research demonstrated "reasonable" fees had a "minimal" effect on visitor numbers.
The funds raised are expected to be channelled into transport, infrastructure and the visitor economy to potentially draw more tourists. Ms Godwin said proceeds from an overnight visitor levy would have "the potential to support and enhance the [tourism] sector's businesses and workers".
"These new powers are a real vote of confidence in our region taking more control of our future. Proceeds from an overnight visitor levy, that people from across the West are used to paying on holiday ourselves, have the potential to support and enhance the sector’s businesses and workers – including with better transport options," she said.
Sir Sadiq said: "Giving mayors the powers to raise a tourist levy is great news for London. The extra funding will directly support London's economy, and help cement our reputation as a global tourism and business destination."
Mr Burnham said: "I'm proud that nearly two million people from all over the world choose to visit Greater Manchester every year. The money they spend contributes about £9 billion annually to our economy, supporting over 100,000 jobs.
"The levy will allow us to invest in the infrastructure these visitors need, like keeping our streets clean and enhancing our public transport system through later running buses and trams, making sure every experience is a positive and memorable one."
Mayor of the Liverpool City Region, Steve Rotheram, said: “This is something I’ve been calling for since I was first elected back in 2017. For too long, cities like ours have been expected to compete on a global stage without the basic tools that other places take for granted.
"Cities like Barcelona and Paris raise tens of millions each year through similar schemes – money that goes straight back into improving the visitor experience and supporting the local people who keep those destinations thriving. Until now, we’ve had no such option. So I’m pleased that the government has listened and acted – giving areas like ours the powers we need to support and grow our economies in a sustainable way.
“Our visitor economy is worth more than £6bn a year and supports over 55,000 local jobs. A modest levy could raise up to £17m annually – money that would stay local and be reinvested in the things that make our region stand out: our world-class culture, iconic events, vibrant public spaces and the infrastructure that ties it all together. It’s only fair that those who enjoy everything our region has to offer play a small part in helping to sustain it.”
North East Mayor Kim McGuinness welcomed the announcement, saying: “I promised that I would introduce a visitor levy when I became Mayor and now we’ve secured those powers from Government.
“Even a small amount levied on each overnight stay will transform the welcome we can give to people coming to North East England from all over the globe. This signals the start of a new era of events and festivals we will stage to bring a new focus to our unique world heritage sites at Hadrian’s Wall and Durham Cathedral, our stunning coastlines and the iconic Tyne bridges and gorge.
“This supports our ambition to double the size of the visitor economy creating thousands of new jobs in the next decade.”
However, Lord Houchen, the Conservative Tees Valley mayor, declared: "I won't be using this power. There will be no tourist tax in Teesside, Darlington and Hartlepool for as long as I'm mayor. Thanks, but no thanks."
Kate Nicholls, chairwoman of industry body ƵHospitality, cautioned that the "damaging holiday tax" could burden the public with costs of up to £518 million, stating: "Make no mistake – this cost will be passed directly on to consumers, drive inflation and undermine the Government's aim to reduce the cost of living."
The move to grant mayors this authority comes in advance of Wednesday's Budget. The proposals will undergo consultation until February 18, examining matters such as whether there should be a ceiling on the levy's scale.
Westminster City Council leader Adam Hug, whose borough encompasses several of central London's key attractions, urged that revenues from the tax should be distributed to local councils rather than retained by mayors. He stated: "While this scheme as drafted will allow mayoral combined authorities to charge and collect the overnight levy, it is essential that the Government ensures mayors split the revenue with the local councils in their area to support these services, without which economic growth will suffer."
Like this story? Why not sign up here for free to get the latest business news straight to your inbox.
