Families planning summer holidays across some of Britain’s most popular tourist destinations could soon face significantly higher accommodation costs under proposed tourist tax powers backed by Labour.
Regional mayors and local authorities across England are considering introducing “overnight visitor levies” that would apply to holiday accommodation, potentially adding hundreds of pounds to the cost of a typical family staycation.
The proposed changes form part of Labour’s wider devolution plans, which aim to give regional leaders more control over raising funds for local services and tourism infrastructure.
Tourist Levy Plans Expanding Across England
According to reports, as many as 10 of England’s 14 regional mayoral authorities are either considering or supporting the introduction of overnight visitor charges.
Areas across Yorkshire, the North East, the Midlands, and the South West are among those exploring the idea, including regions containing popular destinations such as Scarborough, Whitby, the Peak District, Cromer, Sandbanks, and Bamburgh Castle.
Smaller local authorities are also believed to be reviewing the possibility of introducing similar charges. Councils linked to destinations such as Bath, Bournemouth, Oxford, and North Norfolk are among those reportedly considering the move.
Together, these regions account for a large share of domestic tourism in England, attracting millions of staycation visitors each year.
How the Tourist Tax Could Work
The Government is reportedly considering two possible models for the levy.
One option would apply the charge as a percentage of accommodation costs, while another would introduce a flat nightly fee for visitors staying in hotels, campsites, holiday lets, or bed and breakfasts.
Although the final structure has not yet been confirmed, examples from elsewhere in the UK and Europe provide an indication of how the system could operate.
Cities such as Amsterdam already apply percentage-based tourist taxes, with rates reaching over 12% on overnight stays.
Based on current average UK staycation costs, a similar percentage-based charge could add more than £300 to the price of a family holiday.
Even lower rates similar to those already used in parts of Scotland could still increase costs noticeably for families booking longer breaks.
Flat-rate charges are also being considered, similar to existing visitor levies already operating in Manchester and Liverpool under separate local powers.
Existing Support Among Regional Leaders
Several regional mayors and local leaders have publicly supported giving councils greater powers to introduce tourism-related levies.
Greater Manchester mayor Andy Burnham has been among the strongest supporters of the policy and recently said discussions with government had made “good progress”.
London mayor Sir Sadiq Khan has also welcomed the possibility of gaining similar powers for the capital.
Supporters argue that the additional revenue could help fund local infrastructure, improve tourist areas, strengthen public transport, and support public services in regions that experience high visitor demand.
Critics Warn of Rising Costs for Families
The proposal has faced strong criticism from parts of the hospitality sector and some regional politicians.
Opponents argue that introducing new holiday taxes during a cost-of-living squeeze risks making domestic tourism less affordable for working families.
Critics have also described the proposal as a “cash grab” aimed at supporting financially stretched councils.
Reform UK mayor Andrea Jenkyns has publicly ruled out introducing overnight visitor levies in Greater Lincolnshire, arguing that families are already under financial pressure.
She said the hospitality sector and local businesses need support rather than additional financial burdens, warning that extra costs could damage tourism and local jobs.
Similar concerns have been raised by other regional leaders, including Hull and East Yorkshire mayor Luke Campbell and Tees Valley mayor Ben Houchen, who said additional taxes would place further pressure on households and businesses.
Hospitality Industry Raises Economic Concerns
The hospitality industry has also warned that tourist levies could negatively affect domestic tourism and reduce spending in local economies.
A recent report by Oxford Economics for Hospitality UK estimated that widespread implementation of holiday taxes could lead to substantial economic losses, including reduced tourism spending, lower GDP contribution, and thousands of job losses across the sector.
Tourism remains an important part of the UK economy, supporting millions of jobs and contributing significantly to regional business activity.
Industry groups argue that making UK holidays more expensive could encourage more people to travel abroad instead, particularly as overseas travel becomes increasingly competitive again.
Government Says Revenue Could Support Local Areas
Despite the criticism, the Government says the proposed powers would allow mayors and councils to reinvest visitor levy revenue into improving local areas and tourism infrastructure.
Officials argue that regions attracting large numbers of tourists often face additional costs linked to public transport, cleaning services, and maintaining popular destinations.
Under the plans, local leaders would have discretion over whether to introduce the tax and how the money would be used.
The Government has not yet confirmed whether there will be a national cap on the charges or whether councils will have freedom to set their own rates independently.
There are also suggestions that certain types of accommodation, such as second homes or holiday lets, could face higher charges in areas experiencing housing pressure.
Growing Debate Around Staycation Costs
The proposals come at a time when domestic tourism remains highly important for many UK families.
Recent surveys have shown that Britain continues to rank among the most popular holiday choices for UK residents, second only to Spain in some travel polls.
At the same time, the Government has recently promoted plans aimed at reducing the cost of family leisure activities during the summer months.
Chancellor Rachel Reeves recently outlined proposals designed to support “Great British Summer Savings”, while Prime Minister Sir Keir Starmer has spoken about helping families manage the rising cost of holidays and everyday living.
However, critics argue that the introduction of visitor levies risks undermining those efforts by increasing the cost of UK breaks.
What Happens Next?
The final structure of Labour’s proposed Overnight Visitor Levy Bill has not yet been confirmed, and full details are expected to be published later.
The legislation would deliver on Labour’s pledge to expand devolution powers for mayors and local leaders, including greater control over local taxation and tourism funding.
If approved, England would join Scotland and Wales in allowing local authorities to introduce overnight visitor charges.
For now, the debate continues over whether tourist levies represent a practical way to support local services or an additional financial burden that could make UK staycations less attractive for families.
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