UK tourist tax plans raise concerns over international competitiveness - Get updated on what's happening in tourism!

Plans to allow mayors and other local leaders in England to introduce uncapped overnight visitor levies have prompted concerns from the World Travel & Tourism Council (WTTC) about the UK's competitiveness as an international destination. The organisation argues that additional costs could encourage both foreign visitors and British travellers to choose alternative destinations.

Under the plans, local authorities would be able to impose a percentage-based levy on overnight accommodation, including hotels, holiday rentals, bed and breakfasts and other short-term stays. With no national ceiling on the rate, charges could vary between destinations, adding another cost factor for travellers and accommodation providers.

Research points to price-sensitive travellers

WTTC bases its warning partly on research published earlier in 2026. According to the organisation, 29% of travellers in the UK's three largest international source markets – the United States, France and Germany – said they would consider another destination or abandon a UK trip if faced with a €10 visitor tax.

Domestic tourism could also be affected. Among UK residents surveyed, 39% indicated that a £10 levy could prompt them to holiday elsewhere or forgo a domestic holiday.

WTTC estimated that under such a £10 scenario, the resulting reduction in spending by international visitors could reach £14.4 billion in 2027. The organisation sees this as evidence that relatively modest increases in travel costs can have broader consequences for visitor demand.

Cumulative travel costs are the main concern

For WTTC, the issue extends beyond the amount of an individual levy. The organisation points to the cumulative effect of additional charges at a time when destinations around the world are competing for international travellers.

WTTC President and CEO Gloria Guevara argues that making visits more expensive could weaken the UK's competitive position and encourage travellers to spend their money elsewhere. In her assessment, lower visitor spending would affect not only tourism growth but also businesses and employees dependent on the sector.

The economic impact extends well beyond accommodation. Visitor spending supports restaurants, attractions, retailers, transport providers and numerous other businesses in destinations across the country.

Tourism sector already faces cost pressures

WTTC has previously raised concerns about the price competitiveness of the UK tourism industry and the cost pressures facing businesses in the sector. It therefore wants decisions on visitor levies to take account of their possible effects on demand rather than focusing solely on the additional revenue they could generate.

The UK Government's previous consultation on the issue had itself highlighted affordability as an important consideration and pointed to the need for stability and predictability for accommodation providers. It also raised the possibility that restrictions on local decision-making could prevent excessively high charges from affecting visitor numbers.

WTTC calls for predictable and proportionate levies

WTTC is urging the Government and local authorities to ensure that any visitor levies remain proportionate and predictable. International competitiveness should, in the organisation's view, be a central consideration when determining how the charges are structured.

The Council is also calling for a broader assessment of the economic value of tourism. Revenue generated directly through a levy would need to be weighed against the spending visitors bring to local economies and its contribution to employment, businesses and future investment.

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