Holidaymakers in the UK could soon face an additional nightly charge of up to £12 per person, as reports suggest the government is exploring the introduction of a “tourist tax” to address budget shortfalls, as Chancellor Rachel Reeves seeks to stabilise the public finances.
This levy would apply to both domestic staycations and visits from international tourists, potentially impacting all forms of accommodation, from campsites and caravan parks to high-end hotels.
The concept of a tourist tax is not new. Countries such as Spain, France, and Italy already impose similar levies on visitors, with revenues often reinvested into infrastructure, local services, and tourism development. In Wales, a visitor levy is under consideration, with local authorities given the power to set rates. Edinburgh is set to introduce its own scheme in July 2026, implementing a 5% accommodation charge to generate an estimated £50 million annually for city improvements.
According to calculations by the TaxPayers’ Alliance, a £1.25 nightly charge per person across England could raise £560 million annually. Adopting a model similar to France’s tourist tax could generate over £1 billion per year for the UK government.
While such a tax might help address fiscal pressures, it has sparked significant concern within the UK’s hospitality and tourism sector. Sir Rocco Forte, a prominent hotelier, warned that the levy could deter visitors, particularly those seeking budget-friendly trips.
“Travel and tourism is one of the most vital parts of the UK’s economy, contributing over £250 billion annually to GDP and supporting 3.5 million jobs,” said Forte. “This would be a pernicious new tax charged on top of all other taxes. The UK is already not a cheap destination.”
He added that the proposed tax could have a ripple effect, impacting not only accommodation providers but also restaurants, shops, transport services, and attractions that rely heavily on tourism.
International examples demonstrate a variety of approaches to tourist taxes:
- Venice: Overnight visitors pay between €1 and €5 (£0.83–£4.15) per night, while day-trippers are charged €5 (£4.15). Last-minute bookings incur a higher fee of €10 (£8.30).
- France: Charges range from €0.20 to €4 (£0.17–£3.33) per night depending on accommodation type and region.
- Spain: Tourist levies vary between regions, with visitors in destinations like the Balearic Islands paying up to €4 (£3.33) per night.
If implemented, the tourist tax would create new revenue streams for the government but could place additional financial pressure on travellers. This, in turn, may influence booking decisions, particularly for price-sensitive tourists, and could push potential visitors to seek alternative destinations.
Hospitality leaders are urging policymakers to carefully consider the potential economic impact of such a tax. While the revenue could support critical infrastructure improvements, balancing this with the need to keep the UK an attractive destination for both domestic and international tourists is essential.
UKHospitalitry CEOBut Kate Nicholls said a tourist tax would cause untold damage to Britain’s tourism industry.
Speaking to the Daily Express she said: “The UK remains one of the biggest visitor destinations in the world, but the number of inbound visitors hasn’t yet returned to pre-pandemic levels. As well as dealing with other economic shocks over the past four years, our hospitality sector is still recovering and we should not be considering charging visitors, foreign or domestic, an additional tax.”
A Treasury spokesperson declined to comment directly on the reports, stating: “We do not comment on tax speculation outside of fiscal events.”