Major English cities are set to introduce a new tourist tax after mayors were granted powers to impose levies on overnight stays. The move will allow regional leaders to charge visitors staying in hotels, B&Bs, guest houses and holiday rentals to raise funds for local infrastructure and services.
Power to Local Leaders
Local Government Secretary Steve Reed confirmed the new powers, stating that tourists "travel from near and far to visit England's brilliant cities and regions." He added: "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."
The decision, announced on November 25, 2025, follows years of campaigning by metro mayors including London's Sadiq Khan, Greater Manchester's Andy Burnham and Liverpool City Region's Steve Rotheram. However, Tees Valley's Conservative mayor Lord Houchen has already declared he won't implement the tax in his area.
Global Alignment and Local Benefits
Officials indicate the measure brings English cities in line with international tourist destinations like New York, Paris and Milan, which already operate similar schemes. Research from the Ministry of Housing, Communities and Local Government suggests that reasonable charges have minimal impact on visitor numbers.
Sir Sadiq Khan welcomed the decision: "Giving mayors the powers to raise a tourist levy is great news for London. The extra funding will directly support London's economy, and help cement our reputation as a global tourism and business destination."
Andy Burnham highlighted that Greater Manchester attracts nearly two million visitors annually, contributing £9 billion to the local economy and supporting over 100,000 jobs. He stated the levy would fund cleaner streets and enhanced public transport, including later-running buses and trams.
Industry Opposition and Consultation
The hospitality sector has strongly criticised what UKHospitality CEO Kate Nicholls calls a "damaging holiday tax." She warned the measure could burden consumers with £518 million in costs, driving inflation and undermining government efforts to reduce living costs.
The proposals will undergo public consultation until February 18, examining whether to implement a cap on the levy's scale. Westminster City Council leader Adam Hug has urged that revenues be shared with local councils rather than retained solely by mayors.
Steve Rotheram, who has campaigned for the power since 2017, estimated a modest levy could raise £17 million annually for the Liverpool City Region, supporting its £6 billion visitor economy and 55,000 local jobs.
