WTTC warns: local accommodation levies in England could trigger a drop in spending and stall the tourism recovery
On 18 February 2026 at 23:59, the government consultation ends on a model that would give English city regions and their directly elected leaders a new fiscal power: introducing a local charge on overnight stays, the so-called “overnight visitor levy”. This is a proposal that has already been labelled in public as a “tourist tax” and a “holiday tax”, and within the industry it is fuelling a strong dispute over where the line lies between legitimate revenue-raising for infrastructure and a move that can reduce the competitiveness of UK destinations.
The World Travel & Tourism Council (WTTC), an organisation that brings together the private sector in the global travel industry, warns that additional costs and “fragmented” rules from city to city could slow growth, reduce jobs and further worsen the United Kingdom’s price position. WTTC notes that, according to its data, the UK travel and tourism sector has grown more slowly than the global average and that the country is ranked near the bottom of the World Economic Forum’s price competitiveness index.
What exactly is being proposed and who would get the powers
According to the consultation documents, the Government plans to give Mayoral Strategic Authorities (strategic authorities with a mayor) the ability to introduce a local levy on overnight stays in commercially let accommodation. It is emphasised that central government would not impose an obligation to introduce the levy; rather, the decision would be local, with acceptance and rejection mechanisms within the combined authority itself.
Parliamentary analysts at the House of Commons Library clarify that English local authorities have so far not had an explicit statutory power for such a charge, unlike Scotland and Wales, where frameworks have been adopted that enable local authorities to introduce similar levies. In England, “workaround” models have appeared before, for example through business improvement districts, but this now moves toward a formal, legally grounded solution.
Which accommodation would be covered
The discussion starts from a broad definition: hotels, guesthouses and B&B accommodation, hostels, campsites and caravan parks, self-catering apartments and holiday homes, short-term rentals, and even certain categories of university or religious accommodation when let commercially. At the same time, exemptions are being considered, for example for social forms of temporary accommodation, shelters or non-profit capacity for housing and refuge, as well as special categories such as care homes. A key technical question is also whether the levy would be calculated as a percentage of the accommodation price or as a fixed amount per person/night, and whether there would be thresholds below which hosts would not be liable.
Why the debate is so sharp
On the one hand, local authorities and some political actors see the levy as a new source of revenue for “visible” costs that tourism creates: cleaning public spaces, maintaining parks and promenades, managing crowding, additional public transport services, security and cultural offer. In official announcements, the Government emphasises that the revenue could be invested in transport, infrastructure and strengthening the visitor economy, and an argument often cited is that such an instrument is common in major tourist cities worldwide.
On the other hand, the industry warns of an additional burden on an already sensitive value chain, especially in the small and medium-sized enterprise segment: family-run hotels, guesthouses, local tour operators, hospitality businesses and shops. WTTC stresses that these actors carry a large part of the offer in destinations outside London and that an additional charge can mean less investment, higher administrative costs and weaker occupancy in periods when demand already fluctuates.
WTTC’s key argument: price and predictability decide
In its statement of 11 February 2026, WTTC says travellers are increasingly price-sensitive, especially in a weaker economic environment, and that “higher levies” in practice often translate into demand being redirected to competing markets, rather than a change of behaviour within the same destination. They additionally warn that granting powers to a large number of cities and regions could produce a mosaic of different rates, exemptions and rules, which increases operating costs and makes planning harder, especially for international travel organisers.
WTTC also cites a growth comparison: global travel and tourism GDP in 2025 is estimated to grow by 6.7%, while the UK is expected to grow by around 4.3%, which is significantly below the global average. They also note that the sector supports around 4.5 million jobs, roughly one in eight in the country, so any measure that can reduce arrivals and spending, in their view, carries wider consequences for the labour market and regional development.
Numbers and estimates: how much the levy could “cost” the economy
The estimate that has attracted the most attention in the public debate is that, in aggregate, the proposal could reduce the contribution of the visitor economy by £14.4 billion. Some media attribute that figure to WTTC, citing industry research and survey indicators about travellers’ willingness to change destination due to additional costs. In WTTC’s official statement on English levies, such a figure is not explicitly stated, so it remains unclear exactly which model the calculation was based on, as well as which scenario (level of levy, number of included destinations and duration) was taken as the baseline.
But even without that one, most headline-grabbing number, the context is clear: tourism in the UK is already under scrutiny over competitiveness and the overall “cost package” for travellers. WTTC has previously warned about the cumulative effect of different measures and costs that affect travel decisions, including administrative barriers and tax burdens, and has called for a more stable and predictable framework.
ETOA: “smart” taxes and transparency as the minimum
While WTTC puts the emphasis on the risk of weakening competitiveness, the European Tourism Association (ETOA) in its guidelines on tourism taxation advocates an approach that combines several principles: simplicity of implementation, enough time to adapt, clear purpose of revenues and a visible benefit for residents and visitors. In practice, that means any local charge would have to be designed so it is understandable to travellers, administratively feasible for accommodation providers and does not become a “hidden cost” only discovered on arrival.
Transparency is particularly important because of sales channels. A large share of accommodation in the UK is sold via global platforms and intermediaries, where the final price is made up of a series of elements. If levies differ from city to city, and rules change frequently, the risk grows of misrepresenting the price and disputes over who is liable, how the amount is calculated and how it is shown on the invoice. That is precisely why the industry is calling for “one set of rules” or at least uniform national guidelines, even if the decision to introduce the levy is local.
Political framework: fiscal devolution and the fight for local revenues
The Government places the proposal within a broader story of fiscal devolution: more powers and more tools for local leaders who “know their communities best”. In public statements it is stressed that revenue from the levy can help fund investments that strengthen the attractiveness of cities and regions, from transport to culture. Parliamentary materials also mention the possibility that revenue could be spent on broader initiatives that positively affect the regional economy, not exclusively on “narrow” tourism needs, which is a broader mandate than some models in Scotland and Wales.
At the same time, the political debate quickly acquires a social dimension. Critics warn that the additional cost could spill over into household budgets, especially for family trips and at a time when accommodation prices are already high. Supporters counter that levies have been charged in many cities for years, often in relatively small amounts, and that they can be designed so they do not hit the most vulnerable groups, for example through exemptions or reduced rates.
What the consultation asks of the public and industry
The official consultation document lists several “technical” questions that are, in reality, politically and economically crucial:
- who would have the power to introduce the levy and whether it should be extended to areas without directly elected mayors
- what the revenues may be spent on and whether mandatory investment in the visitor economy should be prescribed
- which types of accommodation and stays are covered and which national and local exemptions are justified
- the way the rate is set: percentage-based or fixed, with possible thresholds and special provisions for longer stays
- who is the formal liable party, how the levy is shown, collected and enforced, and how administrative burdens are minimised
- how to ensure transparency, public reporting and an assessment of impacts on equality and vulnerable groups
In practice, the answers to these questions determine whether the levy will be a “small add-on” that travellers hardly notice, or an element that changes the price, consumer behaviour and the investment climate in destinations.
Wider context: how important tourism is and where the burden limit lies
At a time when new charges are being debated, British tourism is trying at once to maintain high international visibility and respond to local pressures – from the cost of public services to sustainability issues. In a more recent report on the economic value of tourism, VisitBritain and VisitEngland say tourism generates about £147 billion a year when both direct and supply-chain effects are included, and that in 2024 it created about £52 billion in tax revenues for the state. These are arguments that strengthen both sides: local authorities claim that part of that pie must be more visible on the ground, while the industry warns that the existing tax burden is already significant and that the focus should be on measures that increase spending and length of stay, not on additional fees.
WTTC in its interventions stresses that the key is “competitiveness” and more effective reinvestment of existing tourism-related revenues. In other words, before introducing new charges, it should be shown that existing tax flows are returned to destinations through infrastructure, promotion and service quality. Otherwise, they warn, there is a risk that the UK is perceived as a market with “layer upon layer” of costs that travellers do not encounter to the same extent elsewhere.
What follows after 18 February 2026
With the consultation closing on 18 February 2026, the Government receives an official base of comments from industry, local authorities and citizens. However, according to the House of Commons Library analysis, introducing the powers will require primary legislation, potentially through amendments to a broader package of devolution legislation. That means the “tourist levy” will not appear overnight in practice, but it will already affect destination planning, local authority budget projections and pricing strategies in the accommodation sector.
For some cities and regions, the new instrument represents an opportunity to finally fund projects that tourism “wears down” faster than local budgets can maintain. For others, especially in destinations that rely on price-sensitive demand, the fear is that even a relatively small levy could tip travellers’ decisions – in favour of Spain, Portugal or another destination where the overall travel cost is more predictable.
In that gap, the question is no longer only whether the levy should exist, but how to design it so it is measurable, transparent and – if it is introduced – clearly justified by benefits that travellers and the local community can see in practice.
Sources:- World Travel & Tourism Council (WTTC) – statement on the risks of local levies and UK competitiveness ( link )- GOV.UK (MHCLG and HM Treasury) – official consultation “Visitor levy in England” and closing deadline 18 February 2026 ( link )- House of Commons Library – overview of the proposal and questions on scope, exemptions and legislative route ( link )- GOV.UK – government press release on the announcement of powers and the purpose of investing revenues ( link )- ETOA – principles of tourism taxation, emphasis on “reciprocity”, simplicity and consultation ( link )- VisitBritain/VisitEngland – “Economic Value of Tourism in the United Kingdom” and key figures on the sector’s value ( link )- Sky News – report on the political announcement of a “tourist tax” and stakeholders’ reactions ( link )- The Sun – media reporting attributing to WTTC an estimate of £14.4bn ( link )
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