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Industry body says giving English mayors powers to impose uncapped overnight levies risks weakening the UK’s competitiveness and diverting travelers to rival destinations
London— Plans to allow mayors and other local leaders in England to introduce uncapped overnight visitor levies could cost the UK tourism sector billions in visitor spending and put jobs and investment at risk, the World Travel & Tourism Council (WTTC) has warned.
The industry body said allowing local authorities to determine visitor levy rates without a national cap could make the UK a more expensive destination at a time when countries and cities around the world are competing aggressively for international tourism.
Under the Government’s plans, English mayors and other local leaders will be able to introduce levies on overnight stays in hotels, holiday lets, bed and breakfasts and other short-term accommodation. Charges will be calculated as a percentage of the cost of accommodation.
While tourism taxes are already used by destinations around the world to generate revenue for local services and visitor infrastructure, WTTC argues that the absence of a national ceiling in England creates a risk of higher and potentially inconsistent costs between destinations.
The organization is particularly concerned about the cumulative cost facing travelers and its effect on the UK’s price competitiveness.
Research published by WTTC earlier this year found that 29% of travellers from three of the UK’s largest international source markets — the US, France and Germany — would consider choosing another destination or abandoning their trip if faced with a €10 visitor tax.
Domestic tourism could also be affected. Some 39% of UK residents surveyed said they would consider taking their holiday elsewhere or not taking a domestic holiday if a £10 levy were introduced.
WTTC estimated that, under the £10 scenario, the resulting reduction in international visitor spending could reach £14.4 billion in 2027.
The organization argues that the implications extend well beyond accommodation businesses. Lower visitor volumes and spending could feed through to restaurants, attractions, retailers, transport providers and other businesses dependent on tourism expenditure.
Gloria Guevara, President and CEO of WTTC, said the UK risked losing business to destinations offering travellers better value.
“The UK should be making it easier to visit, not more expensive,” she said. “Travellers have choices, and if the UK becomes less competitive, they will take their spending elsewhere.
“The risk is that higher costs mean less visitor spending, weaker growth and fewer opportunities for the people and businesses that depend on Travel & Tourism.
“The Government should be focused on keeping the UK attractive and competitive as a destination. If we make it more expensive to visit, we risk losing the very visitors whose spending supports local economies across the country.”
Industry faces mounting cost pressures
WTTC’s intervention comes as tourism and hospitality businesses continue to scrutinise the growing range of costs associated with travelling to and within the UK.
For the industry, the debate is therefore likely to centre not simply on whether visitor levies should exist, but on how rates are determined, how predictable they are for businesses and consumers, and whether the proceeds deliver benefits that strengthen destinations.
WTTC said policymakers should consider the overall economic contribution made by visitors rather than assessing a levy solely according to the revenue it raises.
Visitor expenditure circulates throughout local economies, supporting employment and investment across accommodation, food and beverage, attractions, retail and transport. Any reduction in demand caused by higher trip costs could therefore have consequences extending beyond the businesses responsible for collecting the levy.
The Council has previously raised concerns about the UK’s tourism price competitiveness and argues that additional charges need to be considered alongside the other costs facing international and domestic travellers.
The Government’s previous consultation on visitor levies acknowledged the need for charges to remain affordable and for accommodation providers to have stability and certainty. It also considered whether restrictions on local decision-making could prevent rates reaching levels that adversely affect visitor numbers.
Call for predictable levy regime
WTTC is now urging both central government and local leaders to ensure any visitor levy regime is proportionate and predictable, with the UK’s position in the international tourism market factored into decisions over rates.
The organisation also wants policymakers to assess the potential effect on demand, jobs and investment before setting charges.
The dispute highlights a wider challenge confronting destinations as tourism taxes become increasingly common: balancing the desire to capture more revenue from visitors with the risk that additional costs can influence where increasingly price-conscious travellers choose to spend their money.
For the UK travel industry, the stakes are particularly high. With travellers able to compare the total cost of competing destinations quickly, WTTC argues that taxation policy has become part of the country’s wider battle for international visitors — and the spending they bring.
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