Could London be set to introduce a tourist tax?

The Mayor of London mayor, Sadiq Khan, has said that he will study the issue closely

Published: Nov 21, 2024 04:23:35 PM IST

Updated: Nov 21, 2024 04:28:56 PM IST

A trip to London could soon cost (even) more if a tourist tax is introduced. Image: Shutterstock

The Mayor of London has said he is "happy to look into" the possibility of a tax on visitors staying in the city's hotels. There is currently no such tourist tax in the UK, apart from in Manchester, which has been applying the levy to city-center accommodation since April 2023.

London's hotels have the highest average prices in the UK. According to Statista, the average price per night is £158, or around €190. And this substantial budget could be set to rise further if a tourist tax is introduced for the capital's hotels. The idea has received cross-party support from local politicians, reports the BBC, which states that: "In England, no local authority has the power to directly impose a straightforward tourist tax, though Manchester City Council, among others, has introduced a form of tourism levy via a legal workaround."

The Mayor of London mayor, Sadiq Khan, has said that he will study the issue closely. "I’m happy to look into where it’s worked, what the issues are in relation to that particular policy ... We’ll be looking at what cities are doing not just across Europe, but in the UK as well," he said. The various political parties have no shortage of ideas on how to use the funds that could be raised by this tax: the Greens would like to provide a better network of public toilets, while the Liberal Democrats suggest helping the British capital's nightlife sector.

The tourism sector is less enthusiastic about the idea of charging visitors staying in hotels, adding to the already high cost of a night's stay in the capital. According to Kate Nicholls, chief executive of UKHospitality, an organization representing the various tourism trades, the high rate of VAT is already an obstacle. "The introduction of a tourist tax would only damage that further," she told the BBC. "London remains one of the biggest visitor destinations in the world, but the number of inbound visitors to the capital hasn't yet returned to pre-pandemic levels."

In Europe, the idea of a tourist tax is a recurring theme, often touted as a solution to tourist overcrowding. As recently as this summer, Copenhagen voted in favor of this kind of tax on tourists, with the aim of managing its own tourist numbers. This tax is the highest in Amsterdam, where it has risen from 7% to 12.5% of the cost of a night's stay in a hotel. Similar measures have been taken in Spain, notably in Barcelona, where the tourist tax increased on April 1, in line with a timetable set by the Catalan municipality for successive increases from 2021 onwards. It amounts to around €4.95 per night for visitors staying in a four-star hotel, for example. But that's not the most costly such addition. In Paris, the tourist tax for a night's stay in the same kind of establishment would be €8.13.

But this type of solution doesn't always target hotel guests. In Venice, it's day-trippers, like cruise-ship passengers, who face a charge. This charge applies at specific times of the year (certain days between April and July). The fee is around €5 if you book in advance, but doubles if you buy your ticket at the last minute.