Proposals to introduce an overnight visitor levy in parts of England have provoked sharp criticism from the hospitality industry, which warns of lost business and jobs. Yet international experience and recent academic research suggest that these charges frequently raise funds for local services without deterring tourists in any meaningful way.
Industry fears versus the data
Trade body UKHospitality has warned that a nationwide 5 per cent tax on overnight stays in England could lead to 12 million fewer visits and the loss of 33,000 jobs, framing the levy as an additional burden on a sector still confronting rising costs and a challenging post‑pandemic recovery.
Local officials and some business groups, especially in rural and coastal economies dependent on visitors, also argue levies would redirect demand to areas that remain fee‑free. Several English coastal towns — including Skegness and Hartlepool — are expected to resist the measure after local mayors from Reform UK and the Conservative party opposed it.
What the evidence shows
But the track record from European destinations that already charge overnight fees suggests a more nuanced picture. Cities that introduced visitor levies have continued to see tourist numbers rise. For example, Amsterdam charges what is believed to be one of the higher levies — around 12.5 per cent on overnight stays — yet the city’s visitor totals have increased over the last decade.
Research cited from the journal Tourism Management examined Manchester’s experience after it introduced a £1 per room per night levy in April 2023. The study, published in 2025, concluded the charge had had “no significant impact” on hotel occupancy in the city:
“no significant impact”
That contrast — vocal opposition from national trade bodies versus limited local disruption where levies have been implemented — highlights that impacts depend on local context and the purpose of the charge. In some cases, levies are deployed to manage overtourism; in others they fund transport, cleaning, marketing or conservation projects.
- Revenue potential: Levies can generate material sums for local services and infrastructure.
- Demand elasticity: Evidence suggests modest per‑night charges rarely trigger sharp declines in visits.
- Distributional concerns: Rural and seasonal destinations worry about losing share to levy‑free areas.
Choices facing policymakers
For mayors and councils considering a levy, the central trade‑off is between raising predictable revenue and risking reputational or competitive effects. Where levies are small and accompanied by clear reinvestment plans, they appear less likely to deter travellers. Manchester’s example — introduced through a business improvement district with support from local hospitality operators — indicates a model in which the sector itself can be part of the decision-making process.
Conversely, national proposals that would apply a uniform rate across diverse destinations risk overlooking local sensitivities. Areas with fragile seasonal economies or direct competition from nearby, fee‑free towns could be disproportionately affected.
| Location | Levy | Observed effect |
|---|---|---|
| Amsterdam | ~12.5% on overnight stays | Visitor numbers have continued to rise over the past decade |
| Manchester | £1 per room per night (introduced Apr 2023) | Study (2025) found no significant impact on hotel occupancy |
For the hospitality sector, however, the possibility of a broad 5 per cent levy — and estimates of 12 million fewer visits and 33,000 job losses — make the proposal politically explosive. That explains why major industry bodies remain vocally opposed, while some local business groups have supported carefully designed levies when they see direct benefit.
The debate turning in the coming months will hinge on whether levies are framed and implemented as targeted instruments for local reinvestment, or as one more cost imposed on an industry already citing squeezed margins. Policymakers will need to weigh empirical evidence from existing schemes against the particular economic geography of English tourism before deciding whether a national approach is appropriate.
