The government of Keir Starmer has today given the green light for cities and regions in Britain to impose a “tourist tax”.

Just ahead of tomorrow’s presentation of the new budget by Chancellor of the Exchequer Rachel Reeves, the authorities signalled the start of a public consultation on the details of the measure, such as the level of the tax.

According to reports, the charge is expected to be set at around £2 per night and will apply to both hotels and Airbnb-type accommodation.

An alternative option would be the introduction of a percentage-based levy, so that more expensive hotels would pay a higher tax.

Specifically for London, it is estimated that a tax of around 5% would generate approximately £240 million per year for local authorities. In 2024, London recorded 89 million overnight stays.

It is no coincidence that the Mayor of the capital, Sadiq Khan, has been one of the measure’s strongest supporters. “The additional funding will directly support London’s economy and help consolidate its reputation as a leading global destination for tourism and business,” he said.

“For too long, cities like ours have been asked to compete globally without having the basic tools that in other places are taken for granted,” agreed the Mayor of Liverpool, Steve Rotheram, noting that other major tourist metropolises such as Paris and Barcelona already generate millions annually from similar policies.

However, the measure has already sparked reactions from professionals in the hospitality sector, who believe the tax will certainly discourage tourists, especially domestic ones.

“The idea that a tourist tax will fix the public finances is completely misleading and will result in damage to the UK’s tourism and hospitality sectors,” warned the chief executive of UKHospitality, Kate Nicholls.

“The United Kingdom already ranks very low in terms of tourism competitiveness due to the high VAT rate. Compared to our European competitors, many of whom have VAT rates at half of our 20%, a tourist tax will make us even less attractive to visitors,” she stressed.

It should be noted that the plan, as initially presented, gives local authorities the ability to collect and manage the tax. As a result, some mayors, mainly from opposition parties, stated that they do not intend to implement the measure.