£1 tourism levy could raise £428million a year in tax for English councils


Adding a £1 a night levy to each hotel stay could raise almost £428million a year, according to new our analysis with Open Innovations

On Saturday 1 April, Manchester became the first UK city to introduce a “City Visitor Charge”, after accommodation operators in the city voted 4:1 in favour of implementing a fee on overnight visitors. 

RegionEstimated annual revenue (*based on a 65% occupancy rate)
North East£13.8m
North West£59.8m
Yorkshire and the Humber£37.9m
East Midlands£24.9m
West Midlands£33.9m
South East£87.6m
South West£86.4m

A few weeks ago we published a report on the case for handing more tax powers to mayors and council leaders, giving them more independence, flexibility and control over their economic destiny.

Tourism taxes are already commonplace across much of Europe. French local authorities, for example, have been able to impose one since 1910 in order to raise revenue for funding tourism-related expenditures. 

The taxe de séjour can range from 0.20 cents to €4.20 per person per night, and Airbnb alone collected €148million in taxes in 2022 for payment to French local authorities – an increase of 60% compared to 2021. 

Venice has imposed a tourist tax since 2011 which is used to improve the quality of tourist services such as museums, to finance maintenance work and to protect the area’s cultural and architectural heritage. 

Henri Murison, Chief Executive of the Northern Powerhouse Partnership, said: “Introducing a tourism levy is common sense if we want to be able to invest in our offer to international visitors by protecting and enhancing our natural and cultural assets. 

“It’s not fair that the burden of this upkeep or the cost of increased traffic should fall entirely on local residents – nor does it make sense economically. You wouldn’t think twice about paying a couple of euros in France or Italy, so why should it be any different here?

“A tourism levy is part of a broader conversation about rethinking our broken local government financing system. It’s vital we find ways to ensure council leaders and mayors are able to invest in long-term economic priorities such as transport, without having to ask Treasury every time.”

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