A prominent Birmingham hotelier has issued a stark warning, labelling the government's new tourist levy policy as potentially 'disastrous' for the UK's hospitality industry. The concern follows Chancellor Rachel Reeves's Autumn Budget announcement, which grants local Mayors the power to impose a tax on overnight tourist stays within their jurisdictions.
‘A Direct Tax on Hotels’
Paul Callingham, chairman of Starboard Hotels Ltd, which operates the ibis Birmingham Bordesley Circus and ibis Styles Birmingham NEC and Airport hotels, expressed his deep unease. While he noted that the budget speech itself contained little that would directly harm hospitality, he identified the tourist levy as a significant threat.
"The announcement that the Government will allow local Mayors to impose their own new Tourist Levy’s without any control on how the money is to be spent is disastrous," Callingham stated. He emphasised that this effectively creates a direct tax on hotels, coming at a time when the industry is already under considerable financial pressure.
Practical Burdens and Market Pressures
Callingham outlined the immediate operational challenges this levy will introduce. To comply with the Digital Markets, Competition and Consumers Act 2024, hotels will be forced to include the new charge in their published room rates.
He argued that this presents a major burden for hoteliers, as guests are unlikely to accept higher overall prices. "Our rates are market driven," he explained, "and guests will not pay extra. This will be an increased burden on hoteliers."
Furthermore, he predicted a logistical nightmare for businesses operating in multiple regions. "We will probably see different rates all over the country which for a business like ours will be hard to manage," Callingham said, suggesting the policy had not been fully thought through.
Unlevel Playing Field with Holiday Lets
Adding to his criticism, the hotel boss raised concerns about fair enforcement. He suspects it will be "impossible for the local authorities to collect this Levy from Holiday Let businesses, especially individual Air B&B landlords."
This creates an unlevel playing field, where traditional hotels face a new tax that their short-term rental competitors may avoid, potentially distorting the market further. The announcement, made on 27th November 2025, has therefore sparked major concern across the hospitality sector, which now faces an uncertain and potentially costly new regulatory landscape.
