England's Tourist Tax Consultation Concludes Amidst Warnings of £14 Billion Economic Loss

Consultation on Overnight Visitor Levy Concludes

The public consultation regarding the potential introduction of an overnight visitor levy, commonly referred to as a tourist tax, in England officially concluded on Wednesday, February 18, 2026. Launched on November 26, 2025, by the Ministry of Housing, Communities and Local Government and HM Treasury, the 12-week consultation sought views on granting mayoral strategic authorities the power to impose local charges on overnight stays in commercial accommodations.

The proposed measure aims to provide local leaders with a new revenue stream to invest in economic growth and enhance the local visitor economy, potentially funding improvements in transport, regeneration, and cultural facilities. This initiative aligns with the government's broader goal of devolving power to local authorities, bringing England in line with numerous international cities such as New York, Paris, and Milan, where similar levies are already in place.

WTTC Warns of Significant Economic Downturn

As the consultation drew to a close, the World Travel & Tourism Council (WTTC) issued a stark warning, projecting substantial economic repercussions if a tourist tax is implemented. The WTTC estimates that a £10 daily levy could lead to at least £14.4 billion in potential economic losses for the UK by 2027.

The council's research, conducted between February 7 and 11, 2026, surveyed 2,502 respondents from key inbound markets including the United States, France, and Germany, as well as UK residents. The findings indicate that:

• 29% of international travelers would consider alternative destinations or cancel their trip if a £10 nightly tax were introduced.
• 39% of UK residents would consider vacationing elsewhere or avoid the UK for holidays under such a tax.
• Families are particularly sensitive to the proposal, with 42% of international travelers and 46% of British respondents stating it would be a 'big issue or very big issue' when traveling with family.

Gloria Guevara, President and CEO of the WTTC, stated, 'Our research couldn't be any clearer – proposed visitor taxes would lead to a slump in international visitor numbers to the UK, as well as far fewer domestic visitors to popular English destinations.' She added that 'Billions of pounds will be wiped from the UK economy, leading to much higher unemployment, especially among small shops, restaurants and suppliers to the hospitality sector.'

Industry Bodies Express Strong Opposition

The tourism and hospitality sector has voiced significant concerns regarding the proposed tax. UKHospitality, a prominent trade body, has strongly opposed the plans, describing it as 'the wrong policy at the worst possible time.' The organization highlighted that the sector is already grappling with substantial increases in employment costs and business rates following the 2026 revaluation.

Kate Nicholls, Chair of UKHospitality, warned that adding a new tax would 'strangle growth, reduce investment and put jobs at risk.' She also pointed out that the UK already applies one of the highest VAT rates on accommodation in Europe, suggesting that additional charges could undermine international competitiveness and discourage both domestic and international visitors. The sector currently supports approximately 4.5 million jobs across the UK, representing nearly one in eight positions nationwide.

Next Steps for the Proposed Levy

While there is currently no national tourist tax in England, the consultation explored the possibility for local authorities to introduce their own levies. Scotland has already approved such measures, with Edinburgh's scheme set to commence in July 2026. The debate surrounding the tourist tax also coincides with other changes to UK entry requirements, including the mandatory Electronic Travel Authorisation (ETA) for many travelers beginning February 25, 2026. The government is now expected to review the feedback received during the consultation period before making a decision on the implementation of the overnight visitor levy.