New Labour tourist tax plans could mean that families end up paying significantly more for cheap overnight trips in the UK, experts have warned. Under proposed new plans, flat rates on overnight stays in holiday camps such as Butlin's and Haven could push low-income families out, experts have warned.
Potential Impact on Budget Holidays
The change, which has not yet been confirmed by the government, would give mayors the power to implement a levy on overnight stays. As many as 10 of England’s 14 regional mayors are planning to or considering implementing overnight visitor levies. Bosses at Butlin's and Haven have shared their concerns with the publication and urge Chancellor Rachel Reeves to reconsider the move.
Butlin's said that the levy could be as high as 66% on some of its most popular breaks, with a possible 100% levy in extreme circumstances. Those who need a holiday the most will be hit the hardest, warned Jon Hendry Pickup, the chief executive of Butlin's. The government is reportedly considering a flat rate model of £2 per guest per night, but it could also be based on a percentage of accommodation costs.
Concerns from Industry Leaders
Mr Pickup told The Telegraph: In the spring, the Government said families being able to pay for a holiday should never be too much to ask. In 2025, over 45,000 people booked one of our term-time breaks at just £49 for four nights for a family of four. If the Government levies £2 per person per night, the holiday tax would add £32. This is a 66% tax on our best value breaks, hitting working families the hardest.
Meanwhile, Simon Palethorpe, the chief executive of Haven, said: Our cheapest breaks start at £49 for four days. A £2 per-person, per-night holiday tax would disproportionately affect the lowest-priced breaks. For example, on some of our entry-level holidays, a family of four could see the price increase from around £49 to over £80 – a 65% increase. I fear this will prove difficult to afford for some hard-working families looking to holiday in the UK.
Economic Consequences
Earlier this year, 200 bosses from firms such as Butlin's and Haven wrote to Rachel Reeves, explaining the possible problems with the plans. An Oxford Economics paper for the hospitality industry published last month revealed that the holiday tax could result in the loss of more than 30,000 jobs, as well as less tourism spending, which would negatively affect local economies where such caravan and holiday camps are located.
Debbie Walker, director-general of The Holiday and Residential Parks Association, said that these proposed plans risk pricing some people out of breaks at a time when money is tight.
