London is preparing to introduce a “tourist tax” on overnight visitors; a move that could reshape the capital’s holiday travel season and stir a fierce debate over the cost of visiting one of the world’s most popular cities, according to “The News”.
UK government officials are reportedly drafting plans that would grant mayors the power to levy fees on hotel and short-term rental stays, including Airbnbs. Chancellor Rachel Reeves is said to be overseeing the proposal, which could bring in as much as £240 million a year, according to figures cited by the BBC.
The push arrives on the heels of new evaluations showing London hosts nearly 90 million overnight stays annually. Despite being a global tourism hub, England remains the only member of the G7 whose national government restricts cities from implementing local tourism levies. By contrast, major cities such as Paris, Munich, Milan, Toronto, New York, and Tokyo all impose some form of visitor tax.
A 2017 analysis by the Greater London Authority (GLA) estimated that even a modest £1 per night fee could generate £91 million yearly, while a 5% levy could produce the projected £240 million. The GLA recently commissioned the Centre for Cities think tank to examine new models for devolving financial powers to London, with the tourist tax emerging as a central recommendation.
Yet the proposal has ignited strong resistance within the hospitality industry. Kate Nicholls, chief executive of UK Hospitality, called the idea “shocking,” warning it would burden both international visitors and British families seeking short London breaks.
“Overseas visitors are incredibly important to central London and the city as a whole,” Nicholls said. “This is builders coming to work, businesses attending conferences, families visiting theatres and loved ones. This will have a really big impact on British consumers… and will deter visitors from coming in.”
She also noted that the UK’s VAT rate 20% across England, Wales, and Scotland already places a heavy load on customers. “It’s a tax on a tax,” she said. “If we tax them out of coming to London, we will tax the London economy out of jobs, growth, and investment.”
A spokesperson for Mayor Sadiq Khan pushed back, arguing that a modest levy, in line with other major global cities, would bolster public services and support London’s long-term economic vitality.
The debate intensifies just as millions prepare to descend on London for the Christmas and New Year festivities. Still, the Centre for Cities warns that a levy comparable to those abroad could risk cutting deeply into the city’s visitor numbers, raising the stakes for a city whose global magnetism powers much of its economy.
