The Overnight Visitor Levy Bill, announced in the King's Speech yesterday, has sparked outrage among hotel owners and hospitality industry leaders. The proposed legislation would grant local authorities the power to impose a small fee on overnight stays, effectively introducing a tourism tax across England.
Details of the Proposed Tax
The tax would apply to visitors staying at hotels, holiday lets, bed and breakfasts, and guesthouses. The surcharge is expected to be set at five per cent of accommodation costs, with the revenue directed towards funding local infrastructure and tourism initiatives. However, the proposal has been met with fierce criticism from industry stakeholders.
Cornwall Hoteliers Lead the Charge
Hugh and Steve Ridgway, co-owners of the St Moritz Hotel and Cowshed Spa in Cornwall, have condemned the tax as 'English economic self-harm'. Hugh Ridgway argued that the policy demonstrates a fundamental misunderstanding of how the tourism economy operates. 'Cornwall is the jewel in the crown of English tourism. People travel from across the world to stay here, eat here, spend here and support thousands of local jobs and businesses,' he said.
Ridgway highlighted the immense pressure on hospitality businesses, stating that they are 'working almost to breaking point just to make budget and break even'. He elaborated: 'Margins are wafer thin, staff costs are soaring, energy remains volatile, and consumer confidence is fragile. And now Westminster thinks the answer is to tax visitors even more.' He described the move as 'the stuff of tourism economics of the madhouse'.
Industry-Wide Opposition
UKHospitality has warned that the tax could cost 33,000 jobs and reduce tourism spending by £1.8 billion nationally. Steve Ridgway, former CEO of Virgin Atlantic and previous Chair of Visit Britain, expressed concern that the government is 'making what should be sustainable domestic tourism more expensive and less competitive'.
New polling indicates that one in five Britons would choose not to book a holiday in England if the tax were introduced. Shadow Chancellor Sir Mel Stride described the levy as a 'family holiday tax' that would be 'a blow for seaside towns and hit families in the pocket'. The Conservatives have pledged to oppose the tax when it comes before Parliament.
Impact on Small Businesses
Small business owners in Cornwall fear that the tax, which could add £100 to a two-week family stay, will ultimately be absorbed by accommodation providers rather than passed on to customers. Vanessa Clark, 52, who runs the restaurant Indidog in Falmouth, said: 'It's disgraceful. They're expecting accommodation providers to collect that tax but it will end up being absorbed by them.'
Joby Godolphin, owner of the B&B Storm in a Tea Cup in St Ives, called the tax 'ridiculous' and 'a nail in the coffin'. He added: 'The last thing we need is people feeling like they are being taken the mick.'
Broader Economic Context
The tourism tax comes amid rising costs for hospitality businesses, including increases in the national living wage, national insurance contributions, and the introduction of pension auto-enrolment. These measures have left many Cornish business owners fearing insolvency. In February, four pubs in Cornwall closed on the same day due to financial pressures, though they later reopened.
Butlin's chief executive John Hendry Pickup voiced concerns that the tax would disproportionately affect working-class families. He noted that a £2-per-night fee on a £49 break for a family of four represents a 66 per cent tax increase for those least able to afford it. While Butlin's business would remain sustainable, he stressed that the tax 'makes it extremely difficult for people who are coming to spend time with us outside of school holidays'.
