Industry leaders from the UK's hospitality and leisure sectors have issued a stark warning that British families could face an additional £100 or more on the cost of a two-week holiday in England if government plans for a holiday tax proceed. The caution comes as approximately 200 bosses from leading accommodation firms, including major names like Butlin's, Hilton, and Travelodge, have written directly to the Chancellor, urging a reconsideration of the proposed visitor levy.
Industry Opposition to the Holiday Tax
In a coordinated letter facilitated by the UKHospitality trade body, the executives expressed strong opposition to the plans, which were confirmed in last year's autumn budget. The Chancellor had outlined that English regional mayors would be granted powers to introduce visitor levies on overnight stays in hotels, Airbnbs, and holiday lets. This move is intended to mirror similar devolved initiatives already implemented in Scotland and Wales, with the goal of providing local mayors with additional funds to invest in infrastructure and transport projects.
However, the industry bosses argue that such a tax would disproportionately impact families, jeopardise employment opportunities, and divert money away from local businesses and communities. They emphasised in their letter that "holidays are for relaxing, not taxing," and highlighted the potential negative consequences for the government's growth agenda.
Impact on Families and Local Economies
The letter detailed concerns that the holiday tax could render vacations unaffordable for many hardworking families, forcing them to shorten trips, cancel breaks entirely, reduce spending at local pubs, restaurants, and attractions, or even opt for overseas travel instead. This shift, they warned, would result in spending and job creation occurring outside of England, undermining domestic tourism.
Furthermore, the hospitality sector is already grappling with significant pressures, including rising business rates, energy costs, tax bills, and employment expenses. The industry contributes billions in taxes through business rates, employment taxes, and VAT, which at 20% is noted to be double the rate of competitors in countries like France, Italy, Spain, or Portugal.
Government Response and Mayoral Support
A Government spokesman responded by stating that tourists are drawn to England's cities and regions, and the powers granted to mayors aim to harness this interest to fund local priorities, thereby driving growth and investment. The spokesman added that any new charges are expected to be modest and aligned with international standards, with mayors responsible for determining appropriate levels for their respective areas.
Despite the industry's objections, some mayors, including those in London and Liverpool, have welcomed the plans and indicated intentions to implement levies. This support underscores the ongoing tension between local funding needs and industry concerns over affordability and competitiveness.
The warning from hospitality bosses coincides with broader anxieties within the sector regarding upcoming increases to business rates payments. While pubs recently received a 15% reduction in bills from April following Chancellor support, other hospitality firms continue to face substantial financial strain and are calling for further assistance.
In their concluding remarks, the industry leaders appealed to the government: "Do not turn the Great British break into a luxury. Scrap the holiday tax and back the families, workers, and the businesses who make England worth visiting."
