This would allow mayors (including London’s) to charge tourists an extra fee for hotel or short-stay lets (such as Airbnb’s).
At this stage, the government has not officially confirmed the policy, and any details of which won’t be finalised until the budget is announced on November 26.
Speaking of the possible tax, the Mayor of London, Sadiq Khan, said: “I’m happy to look into where it’s worked, what the issues are in relation to that particular policy… we’ll be looking at what cities are doing not just across Europe, but in the UK as well.”
Rachel Reeves has indicated that a new tourist tax will be part of the Budget at the end of the month
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How much could the tax be?
It is impossible to say at this point, but Edinburgh is to bring in a 5% charge on the cost of a room per night next year, which is the same amount charged by Cologne or the state of Yucatán in Mexico, and what used to be charged by Berlin.
If this 5% levy were imposed in London, where a mid-range hotel carries a pricetag of about £150 per night, a 5% tax would mean an extra £7.50 per night. For one week, that’s an additional £52.50 on your bill.
Tourists booking an Airbnb in London would expect to pay an extra £10 per night, based on an average apartment cost of £200 per night. For those visiting for a week, that would be an extra £70 on their stay.
For a luxury stay at a £300-per-night hotel, travellers would expect to pay an added £15 per night, adding up to a whopping £105 bonus charge at the end of the week.
Tourists planning on staying at one of London’s top luxury hotels should expect to pay an extra £105 per week in tourist taxes
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Is there a different way the tax could be charged?
Paris charges tourists a basic per-person, per-night fee. The total cost depends on where you choose to stay and ranges from just 59 pence at basic campsites, to £4.87 a night for mid-range 3 star hotels, up to a whopping £13.73 for “palace” hotels. For the average couple, a week-long stay in Paris adds an extra £67 to the bill.
Tourists visiting the Big Apple have to pay the New York 8.875% charge on hotel rooms, plus a flat unit fee of around £1.52 per room per night for rooms above a certain cost. Plus tourists visiting New York will have to fork out extra for sales taxes (in the form of New York State, plus City, plus commuter mobility taxes).
Other popular tourist cities like Venice in Italy charge a tourist tax, as well as a day-tripper fee
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Venice, in Italy, charges a standard per-person, per-night city tax of between £1-£5 (depending on accommodation and season) to manage the influx of tourists who descend on the city every year. Additionally, there’s a fee for day-trippers entering Venice, who will have to pay between £5-£10 in entry fees.
This all pales in comparison to Bhutan, which charged a daily tourist fee of £189 (dropping to £150 in the low season) for every day spent in the country.
If this policy goes through, the fees look broadly manageable for those planning budget trips to London. However, those planning on splashing out might be best advised to factor the extra fees into their calculations.