Published on
January 25, 2026
The UK’s proposed increase in visa fees, including hikes in the cost of visit visas and the new Electronic Travel Authorisation (ETA), is projected to result in a loss of one billion, one hundred fifty million pounds in visitor spending by 2030. While the fee increases may appear modest on the surface, they come at a precarious time for the UK’s tourism sector, which is still grappling with the aftermath of the pandemic. As tourism recovery efforts continue, industry leaders warn that the hikes could deter price-sensitive travelers from high-growth markets such as India, China, and South Africa. With rising airfare costs and a strong pound, the UK risks losing its competitive edge against more affordable European destinations, threatening both the immediate recovery and long-term sustainability of its tourism economy.
UK Visa Fee Increases Could Result in £1.15 Billion Loss in Visitor Spending by 2030
A new analysis released on January 24, 2026, by market intelligence firm IndexBox, warns that the UK Home Office’s proposed hike in visa fees could result in a significant loss of £1.15 billion in visitor spending by 2030. This comes at a time when the UK’s tourism sector is still recovering from the impact of the pandemic, dealing with debts and increased energy costs.
The visa fee hikes include a rise in the price of a standard two-year multiple-entry visit visa from £475 to £506, and an increase in the Electronic Travel Authorisation (ETA) fee from £16 to £20. While these hikes might seem modest at first glance, industry leaders in the hospitality sector have expressed concerns over the timing of these changes. With tourism still struggling to regain its pre-pandemic levels, this move could have far-reaching consequences.
Kate Nicholls, Chief Executive of UKHospitality, described the visa fee hike as “a deliberate act of economic self-harm,” emphasizing that inbound tourists spend significantly more on food and drink in the UK than the country exports. Luxury retailers like Fortnum & Mason also joined the chorus of critics, urging the government to make it easier and more affordable for high-spending tourists to visit Britain.
Strain on Price-Sensitive Travelers
The fee increases are expected to disproportionately affect price-sensitive travelers, particularly those from countries like India, China, and South Africa. These markets have been a major focus for UK tourism boards, with efforts made to attract high-spending tourists from these regions. However, with rising visa fees, these visitors could be deterred from making the trip, especially when compared to more affordable destinations in Europe.
While travelers from the United States, Canada, Australia, and most European Union countries, who previously enjoyed visa-free entry, will now face the new ETA charge, the biggest impact is likely to be on tourists from countries that require a visa to enter the UK. These visitors will now face an added financial burden, potentially steering them away from the UK in favor of destinations in mainland Europe.
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Timing and Market Impact
The timing of these fee increases comes at a delicate moment for the UK tourism sector, which is still in the process of recovering from the financial toll of the COVID-19 pandemic. With tourism-dependent industries already struggling with high energy costs, increased debt, and supply chain disruptions, this additional cost burden could further affect their recovery.
Many in the industry are concerned that, coupled with rising airfare prices and the strong value of the pound, these fee hikes will push travelers to consider alternative destinations. Mainstream European destinations, such as France and Spain, with more affordable Schengen visa fees, are likely to become more attractive to travelers, making it harder for the UK to compete.
The Home Office, however, has defended the decision, arguing that the additional revenue from the increased visa fees will be allocated to modernizing UK border services and contributing to the £4 billion asylum accommodation bill. Officials also point out that UK visa fees have remained unchanged since 2022, and the cost of visiting the UK is still competitive compared to other countries, especially when adjusted for currency differences.
Forecasting Negative Impact Without Visitor Growth
Despite these justifications, Treasury modeling seen by The Telegraph suggests that unless the UK can meet its target of 50 million annual visitors by 2030, up from 38 million in 2023, the impact of the fee increases will likely be negative. This growth target will be challenging, particularly considering the rising costs of travel, including higher visa fees and airfares, which could limit the number of international visitors to the UK.
Corporate travel managers are also facing new challenges with these fee hikes. They are being advised to incorporate the higher compliance costs associated with short-term assignments into project bids involving non-visa nationals. This will likely increase the costs of business travel to the UK, particularly for companies that regularly send employees for short-term assignments.
Calls for Impact Assessment
Legal teams and MPs are closely monitoring the situation, with members of the Business and Trade Committee urging the government to conduct a thorough impact assessment. The committee wants to weigh the potential revenue generated from the increased visa fees against the possible losses in VAT revenue, duty-free income, and the loss of jobs in tourism-dependent regions outside of London. The concern is that these regions, which are heavily reliant on tourism income, could suffer if visitor numbers decline due to the increased visa fees.
The UK’s proposed visa fee increases, including hikes in visit visa and ETA charges, could lead to a loss of one billion, one hundred fifty million pounds in visitor spending by 2030. This move comes at a delicate time for the tourism sector, potentially deterring key high-spending markets and impacting the country’s recovery.
While the Home Office argues that the fee hikes are necessary for the modernization of border services and will contribute to the funding of asylum accommodation, many in the tourism and hospitality sectors see it as a step backward. Industry leaders argue that the UK risks alienating high-spending tourists at a time when the sector is still recovering from the pandemic.
The long-term consequences of these fee increases remain to be seen, but they have the potential to significantly impact the UK’s tourism economy, particularly if the targeted growth in visitor numbers is not achieved. As the debate continues, it’s clear that the industry is concerned about the timing and potential repercussions of these changes on the country’s ability to attract international tourists in the years to come.
