Ministers in the UK have confirmed their commitment to proceed with controversial plans that will grant mayors of England's largest city-regions the power to implement a tax on overnight accommodation. The announcement, made on May 15, 2026, during the State Opening of Parliament, has been met with significant backlash from industry leaders who warn of potential damage to the UK's tourism sector and corporate travel market.
The Overnight Visitor Levy Bill Explained
The newly proposed Overnight Visitor Levy Bill, formally announced on May 13, 2026, will empower thirteen Mayoral Strategic Authorities, including London, Greater Manchester, and the Liverpool City Region, to introduce a local levy on various forms of accommodation. This measure, first indicated in the autumn Budget, aims to generate dedicated revenue for local infrastructure, transport, and cultural projects within these areas. The government argues that this initiative aligns England with international practices, citing similar visitor charges in cities like New York, Amsterdam, and Rome, and follows legislative steps already taken in Scotland and Wales to grant similar powers to their local authorities.
Industry Voices Raise Alarm Bells
Despite the government's rationale, the decision has drawn sharp criticism from industry groups. Joss Croft, CEO of UKinbound, expressed concern over additional taxation on international visitors, who already face high VAT, visa, and Air Passenger Duty charges. Croft emphasized the need for clarity on the levy's specifics, including its implementation, cost burden on businesses, and the reinvestment of revenue into the visitor economy. Similarly, Allen Simpson, CEO of UKHospitality, described the move as "wildly unpopular, as well as economically destructive," urging the government to reconsider the tax. Corporate travel managers are closely monitoring the bill's progress, particularly as hotel rates and business rates continue to rise, potentially shifting the UK's cost-of-stay equation unfavorably.
London Mayor Welcomes Potential Revenue Boost
In contrast to the industry's apprehension, Sadiq Khan, the Mayor of London, has welcomed the government's decision, hailing it as "great news" for the capital. The potential for increased revenue from the levy is seen as a significant opportunity to fund vital services and projects within London. The specific operational details of the levy, such as which accommodation types will be included and whether exemptions for business travel will apply, are expected in further government announcements. The impact of this new levy on the overall cost of travel and accommodation for both domestic and international visitors remains a key point of discussion as the legislation progresses.