Such a tax would involve a small nightly charge on accommodation or specific attractions, a concept already widely adopted in leading global cities. From Rome to Amsterdam, and from Tokyo to New York, hotel bills often include an additional fee dedicated to supporting local infrastructure and services. London, despite ranking among the top three destinations worldwide for both international arrivals and tourism spending, remains one of the few major cities without such a levy.
Tourism is a powerful economic engine for the UK. In 2024, the capital alone welcomed around 43 million overseas visitors, generating an estimated £33.7 billion in spending. These figures exclude domestic and business travelers, meaning the overall economic footprint is even larger. Advocates for the tax believe that, with careful design, it could add hundreds of millions of pounds to public funds without discouraging visitors.
A proposed example often cited is a £12 per night charge in London, which could potentially generate up to £500 million annually. Tourists, who already spend generously on local goods and souvenirs, are seen as unlikely to be deterred by such a modest increase — particularly since they already pay similar charges in other destinations.
The idea is not entirely new in the UK. Several cities have already implemented small-scale versions of the policy under “Business Improvement District” schemes. In one city, a £1 nightly fee raised about £2.8 million in its first year, with no recorded decline in visitor numbers. Scotland has introduced powers for local authorities to set similar charges, and Wales is expected to do the same.
Despite the potential benefits, the proposal faces resistance from parts of the hospitality sector. Critics argue that the UK already imposes higher rates of VAT than many competitors, and that adding further costs could risk making certain destinations less attractive — especially for towns and resorts already struggling to draw visitors.
One solution gaining support is to make the tax optional at the local level. This would allow high-traffic destinations, such as London, to implement the charge, while smaller or more vulnerable regions could opt out if they feel it might discourage tourism.
The debate has also extended beyond hotels. Some argue that entry fees for non-residents at major attractions could be another fair way to boost revenue. Many of London’s leading cultural institutions — including museums and galleries — currently offer free admission. A targeted system could allow UK residents to retain free or “pay what you wish” entry, while international visitors would pay a set fee. This approach could reduce the reliance of these institutions on government funding and help offset the costs of maintaining world-class cultural sites.
While a tourist tax would not resolve the UK’s budget challenges entirely, its potential to deliver consistent funding for infrastructure, public services, and tourism development makes it an attractive option for consideration. For the capital, which hosts more than half of the UK’s international visitors, the discussion may soon shift from whether such a tax should be introduced to how it should be implemented to ensure fairness and effectiveness.
