Regional mayors across England, including in Greater Manchester, are to be able to impose a levy on overnight visitors to support investment in local transport and infrastructure and spending.
The announcement from the Ministry of Housing, Communities and Local Government ahead of the Chancellor’s Budget, and will give local leaders options to put a modest ‘tourist tax’ on the cost of overnight accommodation, including hotels, holiday lets, bed and breakfasts, and guesthouses. Mayors would have the power to apply other local exemptions where appropriate, so they can tailor the levy to their local economy.
The move gives English mayors similar powers to counterparts in other major destinations such as Edinburgh, Paris and New York that attract high numbers of visitors. Money raised can be used to fund local projects without needing approval from central government.
Secretary of State for Housing, Communities and Local Government Steve Reed said:
“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.”
In Greater Manchester, plans have been welcomed by city-region Mayor, Andy Burnham. Manchester is already the third-most visited city in the UK, after London and Edinburgh, with city centre hotels already operating a voluntary opt-out £1-per-night visitor charge since 2023 to fund street cleaning and other activities to attract visitors to the city through the Manchester City Centre BID. While guests can opt out of paying the charge, the charge collected £2.8 million in its first year.
Greater Manchester Mayor Andy Burnham said:
“It’s great news that the Government is committing to giving regional mayors the powers to introduce a visitor levy – a measure we have long called for. Greater Manchester already has a thriving visitor economy, and a visitor levy will help us sustain good growth over the next decade.
“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. The levy will allow us to invest in the infrastructure these visitors need, like keeping our streets clean and enhancing our public transport system through later running buses and trams, making sure every experience is a positive and memorable one.”
Industry lobby group for the hospitality sector, UKHospitality, has hit out at plans, warning it could make it more expensive for Brits to travel to other destinations in the UK. Although no mayors have set out a rate they would set a tourist tax, the organisation highlights that a 7% levy, as already in place in Edinburgh, would, when combined with 20% VAT, see visitors charged twice the tax of Paris. Kate Nicholls, Chair of UKHospitality, said:
“[This] will only make life more expensive for working people. It could cost the public up to £518 million in additional tax when they travel in the UK and having knock-on impacts for the wider hospitality sector.
“It will effectively increase the rate of VAT to 27% for working people who want to enjoy a holiday in the UK – making it one of the highest tax rates for consumers in Europe.”
Before powers over a levy on overnight visitors will be devolved to local leaders, businesses, communities and others with an interest in the measure are being invited to have their say on how schemes should work, with a consultation running for 12 weeks.
