Labour's proposed 'tourist tax' could devastate the UK's domestic tourism industry, costing the economy billions and deterring millions of Britons from taking staycations, according to an analysis by the TaxPayers' Alliance (TPA). The plan, outlined in the King's Speech, would give mayors the power to impose an 'overnight visitor levy' on holidaymakers.
The TPA warns that a £10 per night tax could lead to a loss of £13 billion and 42 million domestic overnight visits, while even a £5 levy could cost £9 billion and 30 million visits. The research cites World Travel and Tourism Council findings that 39% of Britons would reconsider or avoid UK holidays if faced with a £10 nightly charge.
Industry leaders have condemned the proposal. Allen Simpson, chief executive of UKHospitality, said: 'The evidence is clear that even relatively small additional charges would deter millions of people from taking a UK break, with many opting to stay at home or travel overseas instead.' He added that the tax 'risks pricing families out, reducing demand, and undermining the very growth ministers want to see.'
Eddy Leviten, executive director of the Tourism Alliance, described it as 'the wrong tax at the wrong time', noting that households are already squeezed by rising costs. He warned that the levy could push businesses to cut hours and jobs, especially amid other cost pressures like National Insurance increases.
The National Caravan Council highlighted that the tax would 'disproportionately impact families choosing lower-cost accommodation'. Craig Beaumont of the Federation of Small Businesses said the 'last thing ministers and mayors should be doing is pricing them out of domestic breaks', adding that it could drive people towards low-cost flights abroad.
