Uncapped UK tourist taxes risk weakening destination competitiveness: WTTC
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Under that GBP 10 scenario, WTTC estimated that the reduction in international visitor spending could reach GBP14.4 bn in 2027, demonstrating the potential scale of the economic impact when relatively modest additional costs influence travel decisions.
The World Travel & Tourism Council (WTTC) warns that plans to give mayors in England the power to impose uncapped overnight visitor levies risk making the UK less competitive as a global destination, with higher costs threatening to divert visitors, spending, and future investment to competing markets.
The warning follows the government’s decision to allow English mayors and other local leaders to introduce overnight visitor levies without a national cap on the rate charged. The levy will apply to overnight stays in hotels, holiday lets, bed and breakfasts and other short-term accommodation, with the charge calculated as a percentage of the accommodation cost.
WTTC’s research published earlier this year found that 29% of travellers from the UK’s largest international source markets – the US, France and Germany – would consider an alternative destination or decide not to visit if a EUR 10 visitor tax were introduced. Among UK residents, 39% said they would consider holidaying elsewhere or not taking a UK holiday if faced with a GBP10 levy.
Under that GBP 10 scenario, WTTC estimated that the reduction in international visitor spending could reach GBP14.4 billion in 2027, demonstrating the potential scale of the economic impact when relatively modest additional costs influence travel decisions.
WTTC says the risk is not simply the cost of the levy itself, but the cumulative impact of making the UK a more expensive and fragmented destination at a time when competing countries and cities are fighting hard to attract international visitors.
Gloria Guevara, President and CEO, WTTC, said, “The UK should be making it easier to visit, not more expensive. Travellers have choices, and if the UK becomes less competitive, they will spend elsewhere. The risk is that higher costs mean less visitor spending, weaker growth and fewer opportunities for the people and businesses that depend on Travel & Tourism. The Government should be focused on keeping the UK attractive and competitive as a destination. If we make it more expensive to visit, we risk losing the very visitors whose spending supports local economies across the country.”
Travel & Tourism is a major contributor to the UK economy, supporting millions of jobs across the country and generating significant economic activity through visitor spending in accommodation, restaurants, attractions, retail, transport and other local businesses.
WTTC has previously warned that the sector is already facing significant cost pressures, while the UK’s price competitiveness remains a concern. The council believes that any policy affecting the cost of travel must be assessed not only on the revenue it can raise, but also on its potential impact on visitor demand and the wider economic contribution of Travel & Tourism.
The UK Government’s own previous consultation acknowledged the importance of keeping any levy affordable and providing stability and certainty for accommodation providers. It also suggested that limits on local decision-making could help prevent excessive rates that might negatively affect visitor numbers.
WTTC is therefore calling on the government and local leaders to ensure that visitor levies remain proportionate, predictable and designed with the UK’s international competitiveness firmly in mind.
The Council also urges policymakers to look beyond the immediate revenue a levy may generate and consider the wider economic value generated by visitors, including spending that supports local businesses, employment and investment.
