Hundreds of bosses urge Reeves to scrap tourist tax

Christopher Jasper

Thu, February 12, 2026 at 7:00 PM GMT+9 4 min read

Rachel Reeves is proposing to introduce a new visitor levy for overnight stays - Ian Forsyth/PA

Hundreds of tourism bosses have urged Rachel Reeves to abandon plans to tax overnight stays over fears the raid risks making holidays unaffordable.

Executives from 200 UK firms, including Butlin’s, Whitbread and Travelodge, have signed a letter in protest against the so-called tourist tax, claiming it will add more than £100 to the cost of a family break.

This will hit room bookings and reduce spending in the wider economy, the letter said, putting jobs at risk and potentially impoverishing communities that rely on tourist income.

The warning comes as a Treasury consultation on handing mayoral authorities in England the powers to impose the visitor levy is poised to close next week.

The companies warned: “For many, this tax will make their holiday unaffordable, meaning families will shorten trips, forgo a break altogether or travel overseas.

“Fewer visitors mean lower spending at local businesses like restaurants, cafes, pubs, taxi firms and shops. In many places, it is tourist spending which keeps high streets alive.”

The letter, also signed by the Hilton and InterContinental hotel chains, the Lake District Hotels Association and Blackpool Pleasure Beach, said the tax will “undermine the Government’s growth agenda”.

It said that coastal resorts, which Labour has targeted for renewal, will be particularly hard hit, with any drop in visitor numbers likely to wipe out entry-level jobs that provide people with a route into work.

Ministers have indicated that they intend to introduce the tourist tax in the next few years, and that it will be levied either as a percentage fee or a flat rate charge.

At £2 per person, per night, a family of four would pay £112 more for a fortnight’s break, according to UKHospitality, which is leading the campaign against the proposals.

Plans to tax tourists in Britain have been pioneered by the Scottish Government, with Edinburgh city council utilising new powers to impose a 5pc tax last October, applicable to overnight stays from July 24th this year, in an effort to raise £50m annually.

While Glasgow and Aberdeen have also backed the levy, tourist hotspots including Argyll and Bute, Orkney, Shetland and the Western Isles rejected it after public consultations.

The Welsh Senedd has also legislated to permit councils to tax visitors £1.30 a night starting next year.

Tourism, which helps support 4.5 million UK jobs and contributes almost £60bn to the economy, is already under pressure from rising business rates, inflated energy bills and high labour costs.

That has made Britain one of the most expensive places on the planet for holidaymakers, ranking 113th out of 119 countries, according to the World Economic Forum.

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The World Travel & Tourism Council (WTTC) warned separately that the visitor levy would add to the cumulative impact of rising taxes, high operating costs and red tape, which had limited growth in the industry last year.

The trade body said holidaymakers were becoming increasingly price sensitive amid deepening economic gloom, with value for money outweighing all other considerations.

It said tourist taxes worldwide, while raising money, had been found to add to complexity, discourage investment and undermine long-term competitiveness.

Gloria Guevara, the WTTC’s president, said: “Our research proves time and time again that higher levies force travellers and businesses to choose alternative destinations as they opt for more affordable and predictable markets to visit and invest in.

“Policymakers need to focus on making the UK more competitive, reinvesting tourism-generated revenues more effectively.”

In its consultation on the visitor levy, the Government said the tax would help “deliver more long-term, locally led investment in transport, regeneration and cultural assets that can unlock growth and make places more attractive for residents, businesses and visitors.”

A government spokesman said: “Tourists travel from near and far to visit England’s brilliant cities and regions.

“We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investment in the economy, supporting thriving communities.

“We expect any new charges to be modest and in line with other countries, and it is for mayors to consider the right level for their area.”

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