Amid speculation surrounding a potential tourist tax for London, Mayor Sadiq Khan considers a nightly levy on visitors to fund public services and support the struggling hospitality sector.
London Mayor Sadiq Khan has sparked debate over the prospect of introducing a ‘tourism tax’ for visitors to the capital, with a proposed levy of £1-2 per night on accommodation, including hotels and short-term rentals like Airbnb. The move, aimed at providing much-needed financial support to local infrastructure and the hospitality industry, mirrors similar schemes successfully implemented across major European destinations such as Paris, Berlin, and Amsterdam.
Tourism has long been a vital contributor to the UK economy, generating billions in annual revenue. However, ongoing financial pressures—including post-pandemic recovery, rising national insurance contributions, and an increased minimum wage—have left the hospitality sector struggling. Some industry insiders view the proposed tax as a vital lifeline, offering funds to improve transport, street maintenance, and arts funding, which remains significantly lower than pre-2010 levels.
Penny Paddle, partner at law firm Spencer West LLP, highlights the dual impact of such a tax, noting both its potential benefits for local communities and the concerns within the hospitality sector. Critics worry that additional charges could deter budget-conscious travellers while increasing administrative burdens on businesses already facing economic strain.
Despite the discussion surrounding the initiative, the UK Government currently has no plans to implement such a policy. Whether London follows in the footsteps of European cities with a tourism levy remains uncertain, but the debate over balancing visitor contributions with economic sustainability is set to continue.