UK regions debate implementation of overnight visitor levy

Local authorities in the United Kingdom are debating the implementation of an overnight visitor levy, often referred to as a ‘tourist tax’. In Cornwall, the council is considering the measure as part of negotiations regarding its devolution settlement. Officials have noted that Cornwall receives approximately 16 million visits annually, with 4.2 million being overnight stays, which impact local infrastructure and communities.

Critics and hospitality industry groups, including UKHospitality, have expressed concerns that such a levy could place undue pressure on the hospitality sector. Opponents argue it may discourage domestic overnight stays, disproportionately affect low-income households, and lead to reduced visitor expenditure. Modeling from the Tax Policy Associates thinktank suggests that a proposed tax of up to 5 per cent could potentially raise significant revenue but might also result in the loss of millions of room-nights and substantial overall visitor spending.

In the Tees Valley, Mayor Ben Houchen has indicated he will not exercise the right to apply the levy, stating that growth should not be pursued through increased taxation of citizens.