Chronological coverage updated 10th September 2026 19:14.
Update 1 · 10th September 2026
Hospitality Sector Warns Against English Mayoral ‘Tourist Tax’ Powers
Ministers are facing sharp criticism from the UK hospitality industry following an announcement by Local Government Secretary Angela Rayner granting English regional mayors statutory powers to charge a levy on holiday accommodation, including hotels and short-term Airbnbs. The policy, intended to bolster local authority revenue amid funding pressures, allows regional leaders to set percentage-based overnight levies without statutory spending restrictions. Sources: theguardian.com.
Industry Backlash and Economic Impact
The announcement prompted immediate opposition from business leaders and industry groups who had anticipated strict national limits on levy rates and spend allocation. Whitbread, owner of Premier Inn, warned the policy would be highly damaging to tourism, while regional operators cited severe trading pressure. Sources: theguardian.com.
A 5% overnight levy applied across England could lead to 33,000 job losses and reduce economic output by £2bn, hit hardest in tourist regions like the Lake District. — according to theguardian.com, as reported by theguardian.com.
According to theguardian.com, Eddie Nelder, Co-owner of Choice Hotels chain said: “We’re here trying to stay alive, waiting for a lifeline from the government and we get another hammer blow. It feels like we’re being strangled.”.
Regional Implementation Split
Every Labour metro mayor signed a joint letter to Rayner agreeing to cap initial levies at 5% across major urban centers, citing similar taxes in Paris, New York, and Edinburgh, where a 5% levy was introduced in July. Conversely, mayors representing Reform UK and the Conservative Party along the east coast publicly declined to institute the tax. In Wales, local authorities will gain powers to charge £1.30 per person per night starting in April 2027. Sources: theguardian.com.
The government intends to present the legislation to Parliament within months. Westminster ministers plan to establish a cap on the maximum number of consecutive chargeable nights to protect long-term residential tenants, while allowing mayors discretion over festival campsite exemptions and revenue sharing with local councils. Sources: theguardian.com.
- English metro mayors will receive powers to levy percentage-based taxes on commercial overnight accommodation.
- UKHospitality projects a potential £2bn economic drag and 33,000 job losses if 5% levies are widely instituted.
- Labour mayors committed to a 5% cap, while east coast Reform UK and Conservative mayors refused to charge the tax.
Sources: theguardian.com