The hospitality and tourism industry warns businesses face a fresh challenge from a proposed “holiday tax” in England – which could have a serious impact on family holidays
Families risk being priced out of staycations by a new ‘tourist tax’, the government has been warned.
Small businesses – from guesthouses to B&Bs – also say it could lead to closures. Labour is proposing to allow regional mayors in England to introduce a “visitor levy” on overnight stays, as already happens in some European countries.
While details of how it would work are still to be finalised, it could either be a per head charge or a percentage of the cost of the stay. Critics claim that, for a family of four on a two-week summer holiday, it could add more than £100 to the bill. At the most extreme, a family of six holidaying in May for four nights in Blackpool for £49 would see that cost almost double to £97, they say.
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Trade body UKHospitality has now sent Chancellor Rachel Reeves a joint letter signed by 200 businesses, big and small, warning about the consequences.
The group – which includes Butlin’s, Haven, Hilton, IHG Hotels & Resorts, Merlin Entertainments, Parkdean Resorts, Travelodge and Whitbread – says the proposals will “hit families hardest, put jobs at risk and drain money from local businesses and communities”.
Industry chiefs claim that even a £2 or £3 per head tax over a week could make the difference for families on a budget.
Other parts of the UK are already introducing visitor levies. From April 1, 2027, tourists staying overnight in Wales will be charged up to £1.30 per person per night.
Stays at campsites and hostels will incur a lower nightly charge of 75p. And Edinburgh will become the first place in Scotland to charge visitors a tourist tax on top of the cost of their accommodation from this summer. Anyone booking a hotel, B&B, or holiday let for stays in the capital after 24 July will be subject to the 5% levy.
The UK Hospitality co-ordinated letter is trying to prevent the same happening in England, branding it a “holiday tax” as it will hit Brits as well as overseas visitors who take a break. A government consultation on the plans ends on February 18.
“For millions of hardworking families, a UK holiday is their chance to switch off and spend quality time together,” the letter says. “For many, this tax will make their holiday unaffordable, meaning families will shorten trips, forgo a break altogether, reduce their spending with pubs, restaurants, events, leisure activities and local attractions, or travel overseas – spending their money and creating jobs elsewhere.”
It concludes: “Do not turn the Great British break into a luxury. Scrap the holiday tax and back the families, workers and the businesses who make England worth visiting.”
Allen Simpson, chief executive of UKHospitality, said: “Holidays are for relaxing – not taxing. Whether you enjoy a city break, a rural retreat or building sandcastles on your beach holiday, you’re already paying your fair share of tax. In fact, it’s one of the highest tax rates for visitors in Europe and the holiday tax will only increase that further.”
Ian White from StayBlackpool, the popular resort’s hotel and guesthouse association, said: “The whole idea is insane.”
Melanie Cable-Alexander, who runs Ellesmere House, a small B&B in Castle Cary, Somerset, said she was “deeply concerned”. She added: “The legislation is woolly, and for small operations like ours, any extra charge on guests risks making the business simply not viable.
“If we have to keep pushing prices up, it stops being worth operating at all, as it is margins are tight. Most B&Bs aren’t hotels – they’re people’s homes. We only have three guest rooms because if we had more, we’d be pushed into business rates and expensive extra regulations like fire doors and additional safety requirements.
“At that point, unless you charge a fortune, you’re running at a loss. And charging more completely changes guests’ expectations, they arrive expecting something glamorous, not a hospitable family home.
“B&Bs already contribute hugely to local communities. Our guests eat out, use pubs, visit local shops and attractions. We may be small, but we support the local economy in a big way. We also employ local people – cleaners, gardeners, tradesmen – so we’re already helping to fund local infrastructure. A tourist tax risks tipping small, community-based businesses like ours over the edge.”
Jenny Angel, owner of the Rosedale Bed & Breakfast in Lyndhurst New Forest, said: “I am concerned about the tourist tax because I am a small bed and breakfast. I believe the type of guests that stay with me would not want to pay more as I would have to up my prices and so it would not be worth me continuing as I feel we would be priced out of business.”
A government spokesperson 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 investment in the economy, supporting thriving communities. We expect any new charges to be modest and in line with other countries, and it is for Mayors to consider the right level for their area.”
