English Mayors Gain Power to Implement New Visitor Tourist Levies

The UK government is moving forward with plans to grant English mayors and local authorities the power to introduce visitor levies, commonly referred to as 'tourist taxes'. This policy shift aims to provide councils with new revenue streams to support local economies and infrastructure. Unlike existing systems in Scotland and Wales, which often restrict revenue usage to tourism-related projects, the proposed English model offers broader flexibility for how funds can be utilized by local governments. The legislation follows a consultation period that concluded in early 2026, marking a significant change in how English cities manage tourism-related costs.

In response to concerns from hospitality industry leaders regarding the potential impact on jobs and competitiveness, Labour Party regional mayors across ten city regions have committed to voluntarily capping any such levy at 5% of the accommodation cost. However, the implementation remains decentralized; not every council will necessarily adopt the tax, and those that do may set different rates or exemptions. The policy is expected to roll out gradually as individual local authorities assess their specific economic needs and tourism pressures.

All domestic and international travellers booking overnight accommodation in participating English regions will be affected. This includes guests staying in hotels, bed and breakfasts, and short-term rentals like Airbnb. Exemptions are expected for specific categories, such as temporary accommodation for the homeless and certain non-profit shelter providers.

Makutet expects that the introduction of these levies will lead to a fragmented pricing landscape across England, potentially influencing traveller behavior as visitors compare the 'all-in' cost of stays between different regions. We anticipate that cities with high tourism volumes will be the first to adopt these measures to offset the maintenance costs of public infrastructure, while more rural or less-visited areas may avoid the tax to remain competitive.