The Overnight Visitor Levy Bill, introduced in the House of Commons on Wednesday (November 4), would give mayors and local leaders the power to introduce a small fee on overnight stays in England. Greater Manchester Mayor Bev Craig has described the move as a major moment for devolution, while stressing that any such tourism tax should be truly devolved, with the money raised used within the city-region.
How the levy would work
Under the bill, money raised through the levy would be invested locally in places and facilities used by both visitors and residents. Mayors would decide whether to introduce a levy and, according to the Ministry of Housing, Communities and Local Government, could invest it in what makes their regions special and improves the visitor experience, from better high streets to public spaces, including public toilets and parks, cultural events, security and destination promotion.
The levy would be charged as a percentage rate of the cost of accommodation rather than a flat fee, to ensure lower-cost family breaks are protected, meaning those who choose cheaper accommodation would pay less. Ten mayors have also committed that any levy introduced in their areas would be no higher than 5 per cent, providing certainty for visitors and businesses while preserving local choice.
Manchester's existing visitor charge
Manchester has already operated a visitor city charge since 2023. The Business Improvement District introduced a £1 per room per night charge that year, raising £2.8 million in its first year and helping to increase street cleaning across the city. The levy applies to guests staying within the ABID zone, which as of May 2026 includes 81 accommodation establishments.
Since its launch, the charge has raised £10.5 million for the city and has supported bids for, securing and developing events that attract visitors and generate overnight stays, including The BRIT Awards, the MOBO Awards and NBA games, alongside home-grown events such as SUPER DUPER and SCENE: Manchester's LGBTQ+ Film & TV Festival. The money has also funded marketing campaigns promoting Manchester to domestic and international audiences.
Commenting on the bill, Ms Craig said: "In Greater Manchester, we campaigned for an Overnight Visitor Levy to boost our region and give mayors the powers to raise additional funds through a modest levy on overnight stays. This would give us access to new funding that we can reinvest into our places to support our visitor economy, improve public services and drive good growth."
She added: "In Manchester we pioneered a similar scheme in recent years which has been a resounding success. Our industry-led City Visitor Charge has shown that the model can work, generating millions of pounds that has been invested back into things like street cleaning and our work to attract major events, with widespread support from the hospitality sector."
Details and protections in the bill
The bill sets out new details on how the levy will work, including who will be protected, how decisions will be made locally and how the rules will be enforced. The levy will only apply to the first 28 consecutive days of a stay, as longer stays count as long-term accommodation. Protections will ensure occasional hosts, such as people who only rent out a spare room from time to time, will only pay the levy if they earn above a set amount. Local leaders and mayors will be able to adjust this threshold to reflect their local tourism market.
Student accommodation, care homes, children's homes, and school boarding houses will all be exempt, and mayors and local leaders will be able to set additional limited local exemptions, such as for camping pitches. Temporary accommodation, shelters and refuges will not be charged either, because they provide vital homes for vulnerable people rather than for visitors. Hotels and other accommodation providers will be responsible for accounting for and paying the levy, with the government providing guidance on how to register, pay and report.
Kumar Mishra, Chair of the Manchester Accommodation BID, said: "Manchester's experience shows what can be achieved when the visitor economy works together and investment raised through overnight stays is put back into making the destination even stronger. Through the Manchester Accommodation Business Improvement District, city centre hotels and serviced apartments have already been supporting activity that attracts visitors, strengthens major events, and improves their experience of Manchester."
Tourism Alliance response
Responding to the bill, the Tourism Alliance, which represents more than 65 trade associations across the UK visitor economy, praised how the levy will be collected but warned that it does not protect the visitor economy and that visitors already face heavy taxation. Eddy Leviten, Executive Director of the Tourism Alliance, said: "The Government has listened on how the levy is collected. Letting businesses use booking platforms to collect and pay, a threshold for smaller operators, and a full consultation before any rate change are all safeguards we argued for."
He added: "But the Bill does not protect the visitor economy it will tax. There is no cap on the rate. There is no ring-fence: the money goes into the mayor's general fund, and the Bill does not mention tourism once. And in mayoral areas, local councils have no veto."
Leviten continued: "Ministers point to the UK's low share of local taxes. They ignore how heavily visitors are already taxed nationally. Visitors pay 20 per cent VAT on accommodation, against 5 per cent to 15 per cent across most of Europe, and the UK ranks 106th of 110 countries on price competitiveness. A levy on top is an extra cost, not a rebalancing."
The Tourism Alliance will work with MPs and Peers to put a cap, a ring-fence and a local veto on the face of the Bill, and to cut VAT on accommodation to 10 per cent before any levy is introduced.
