Tourists visiting some of England’s most popular destinations could soon find a new line on their hotel bills: a “tourist tax” or overnight visitor levy. The measure, announced in the autumn Budget by Chancellor Rachel Reeves on November 26, 2025, is set to give locally-elected mayors across the UK the authority to introduce modest charges for overnight stays. The proposed levy would apply to hotels, bed and breakfasts, holiday lets, guesthouses, and other paid accommodations. According to the government, the new powers are designed to let mayors reinvest the funds directly into their communities, enhancing public spaces, infrastructure, and the overall visitor experience.
The move comes as England attracts more than 130 million overnight visits each year, with cities and regions like Greater Manchester, the West of England, and Yorkshire seeing significant tourist traffic. The government says the levy is modeled on similar fees already in place in cities such as New York, Paris, and Milan. Secretary of State for Housing, Communities and Local Government Steve Reed explained, “Tourists travel from near and far to visit England’s brilliant cities and regions. We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.” (Yorkshire Live)
Andy Burnham, Mayor of Greater Manchester, has long pushed for such a measure, arguing that locals already pay similar fees when traveling abroad. He hailed the announcement as “great news,” adding, “The levy will allow us to invest in the infrastructure visitors need, like keeping our streets clean and enhancing our public transport system through later running buses and trams.” (Yorkshire Live) Burnham emphasized that Greater Manchester’s thriving visitor economy, which attracts nearly two million people annually and contributes around £9 billion to the local economy, could see sustained growth with this new funding tool. “I’m proud that nearly two million people from all over the world choose to visit Greater Manchester every year. The money they spend contributes about £9 billion annually to our economy, supporting over 100,000 jobs,” he said. (Yorkshire Live)
York and North Yorkshire are also looking to follow suit. Mayor David Skaith called the visitor levy a “total gamechanger for our region,” noting that the area receives 41 million visitors annually. “A small charge on overnight stays could revolutionise how we deliver transport, support businesses, invest in infrastructure and the visitor economy. Building the healthy and thriving communities for our residents and everyone that comes to visit them,” Skaith told Yorkshire Live. He further estimated that a modest levy could raise £50 million for York and North Yorkshire, funds that could “turbocharge investment into things like transport, but also really boost investment into the tourism and hospitality sector, which is so badly needed.” (Local Democracy Reporting Service)
West Yorkshire Mayor Tracy Brabin echoed these sentiments, saying, “I’m delighted the government has heard the strong case Mayors have made for the power to ask visitors to pay a small fee to help drive growth. This will allow us to invest more into making our regions even better places to visit, unlocking opportunities and help our businesses thrive. This is a further vote of confidence in devolution and shows the government is backing mayors to achieve our ambitions.” (Yorkshire Live)
In the West of England, Bath and North East Somerset councillor Kevin Guy explained to the BBC that any extra income generated by the levy would be used for “enhancing the public area and environment.” The Bill enabling this tourist tax is currently making its way through Parliament, with a public consultation running until February 18, 2026. (BBC Somerset)
While many local leaders and politicians have welcomed the measure, not everyone is convinced. Some hoteliers and business owners have expressed “deep concern” about the potential impact on their operations, particularly in areas where tourism is a crucial economic driver. The MP for Scarborough and Whitby, Alison Hume, supported the principle of a tourist tax, stating, “Scarborough, Whitby and the villages in my constituency are the jewels in North Yorkshire’s tourism crown. Local coastal communities absolutely should benefit from a simple tourist tax.” However, she stressed the need for “careful consultation” to determine how the levy would be applied, especially to short-term lets, and emphasized that “figures demonstrating revenue raised, where it has been raised and where it is being spent would have to be transparent and easily accessible.” (Local Democracy Reporting Service)
Mayor Skaith acknowledged these concerns, describing the announcement as a “first step.” He committed to “working with local authorities, businesses, and the tourism sector as a whole, to really bring them all on the journey together and actually work out what we want to see from such a levy, how it’d work, how it’d be collected.” (Local Democracy Reporting Service)
The government has clarified that any new levy would be “modest” and would only apply to overnight stays in paid accommodation. Exemptions would include emergency accommodation, homeless shelters, and registered Gypsy and Traveller sites used as primary residences. Local mayors would also have the flexibility to apply additional exemptions tailored to their area’s needs. (Yorkshire Live)
Crucially, the funds raised would remain under local control, without the need for central government approval for spending decisions. This is seen by many as a significant step forward in the ongoing process of devolution, empowering regional leaders to address local priorities more directly. As Secretary Reed put it, “We’re giving our mayors powers to harness this and put more money into local priorities.” (Yorkshire Live)
Research cited by the government suggests that reasonable tourist levies have only a minimal impact on visitor numbers, a point highlighted by Burnham and others who note that similar charges are commonplace in many major global destinations. In London, for example, the levy could be used to improve some of the capital’s busiest streets and support its vibrant culture and entertainment scene, including smaller venues. In Liverpool, the funds could help support major events—such as the upcoming UEFA EURO 2028—and invest in infrastructure that benefits both visitors and locals. (Yorkshire Live)
Businesses, communities, and members of the public are being encouraged to participate in the 12-week consultation process, which is open until February 18, 2026. The consultation is available on the GOV.UK website, allowing stakeholders to provide input on how the measure should work, what exemptions might be needed, and how the funds should be allocated. (BBC Somerset, Local Democracy Reporting Service)
The proposed tourist tax represents a significant shift in how local authorities in England can fund improvements to their regions, potentially transforming the visitor experience while supporting the communities that welcome millions each year. Whether the final scheme will satisfy both local leaders and business owners remains to be seen, but one thing is clear: the debate over the tourist tax is likely to shape the future of tourism in England for years to come.
