England Tourist Tax: Nightly Levy on Hotels and Airbnbs 2026

England is set to introduce a tourist tax, a nightly levy on hotel and Airbnb stays, under new plans to give mayors new powers. The proposal, first raised by Keir Starmer’s government in November, aims to generate hundreds of millions of pounds for local services but has sparked concerns from the hospitality industry.

What Is the England Tourist Tax?

The tourist tax, also known as a visitor levy, would allow mayors to charge a fee to visitors staying overnight in hotels, Airbnbs, and similar accommodations. The revenue raised would be invested in local transport and public services, with mayors deciding how best to allocate funds. The tax is expected to be charged as a percentage of the accommodation cost, rather than a flat fee, to protect budget holidays.

How the Levy Works

Under the plans, mayors in England would gain the power to implement the levy, similar to a scheme already running in Scotland. The tax would apply per night, and the rate would vary by region, as mayors tailor it to their area’s needs. Ministers do not expect the levy to become overly expensive, but details are still being finalized.

Comparison of Tourist Tax Schemes

Impact on the Hospitality Industry

The hospitality sector has voiced strong opposition. Allen Simpson, chief executive of UKHospitality, warned that the plans would put jobs at risk in some communities. He noted that the new tourism tax in Edinburgh was “already having damaging effects” and argued that UK holidays were “already more expensive” due to higher VAT. The industry, already squeezed by tax rises and extra employment costs from last year’s budget, fears further strain.

Key Takeaways for Travelers and Businesses

• Higher costs: Expect a nightly surcharge on hotel and Airbnb stays in England if the levy is implemented.
• Regional variation: The tax rate will depend on the mayor’s decision, so costs may differ by city.
• Revenue for local services: Funds raised will go towards transport and public services, potentially improving visitor experiences.
• Industry concerns: Hospitality leaders warn of job losses and reduced competitiveness.
• Budget protection: Percentage-based charges aim to keep budget holidays affordable.

What’s Next for the Tourist Tax?

Housing secretary Angela Rayner is meeting mayors on Thursday to outline the plans. If approved, mayors could start implementing the levy, but the timeline remains unclear. The government hopes the tax will boost local economies without deterring tourists, while the hospitality industry continues to lobby against it.

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