In many
European
cities, paying a
tourist tax
There’s nothing novel about it. If anything, it’s anticipated.
From
Paris
to
Barcelona
to
Amsterdam
Most of our preferred locations often require an additional charge, which we might settle either at our lodging or upon arrival at the airport.
The aim is straightforward: to supply the city with funds for maintenance and similar needs.
sustainability
programs, along with higher demands on public services.
As numerous destinations struggle with the impacts of overtourism, tax rates are rising, and additional levies are being implemented. For instance,
Venice increased its tax for day visitors by double earlier this year.
, while
the Azores
Implemented one on the first of January.
Lately, there has been discussion about
London
Becoming part of the club. Recently, last month, the Centre for London published a report titled “Arts for All.” The document encourages the Greater London Authority to consider ‘implementing a tourism levy’ as a means to support investments in London’s artistic and cultural landscape.
Last year, Mayor
Sadiq Khan
expressed his possible backing as well. In October, he informed The Standard that he would ‘be glad to examine’ if a levy on overnight stays could be viable.
However, although the arts require funding—the report indicates that hands-on involvement with
arts and culture
In London, this figure is below or near the national average. What implications might an additional tourist tax have for the broader community, particularly for day trippers visiting from within the UK?
Would implementing a tourist tax in London be beneficial?
‘Tourists will find it easier to accept the tax if they know how it’s being utilized,’ clarifies travel expert Deepak Shukla, CEO of
Pearl Lemon Adventures
, a travel and tourism firm based in London, for more information.
Basically, if the funds from tourist payments were used for enhancing infrastructure, transportation systems, and improving key attractions, everyone might be more inclined to support this approach.
It’s clear that London experiences the impacts of overtourism. The number of visitors to the UK continues to rise; according to VisitBritain, there were approximately 41.2 million trips to the country throughout 2023—a 1% increase from 2019—with the majority making their way to the city center.
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London has similarly been referred to as the ‘Wild West’.
Airbnbs
In Westminster specifically, council members mentioned that over 10,500 residences were utilized as vacation rentals. Locals assert that an upscale apartment building near Hyde Park accommodates more visitors each evening than The Ritz does.
With rent prices in the capital already eye-wateringly high, short-term lets only serve to make living in the city even more expensive.
London boasts the busiest streets in Europe, according to an analysis by data firm Inrix, which revealed that motorists in the city wasted 101 hours stuck in traffic during 2024.
What types of issues might arise from implementing a tourist tax in London?
Although there is some validity to the concept, Shukla also points out that a tourism levy ‘comes with its own set of challenges.’
He states that the effectiveness of a tax relies on numerous elements, where the level of tourist activity plays a significant role.
At present, approximately 30 million visitors travel to London annually. If this figure remains unchanged even after implementing a tourist tax, it would provide a consistent stream of revenue. Nonetheless, should the levy discourage these travelers, it might result in reduced visitation numbers and consequently lower revenues than anticipated.
Another worry is how competitive London remains against other international hubs. At present,
Spanish cities
like
Madrid
and Valencia (which boast better weather than the UK) don’t have a tourist tax. Neither do up-and-coming European city break destinations like
Helsinki
or
Tallinn
.
‘If an additional expense like tourist tax is imposed, travellers may opt to visit places that do not have these costs, impacting London’s tourism sector,’ states Shulka.
Likewise, Mayor Sadiq Khan emphasized that the funds collected should undergo strict monitoring. Distributing these resources away from local or regional areas where residents might not see direct advantages could be considered unjust.
He stated: “Providing that assurance to the tourism industry is truly crucial, as they have faced challenging times, especially following the pandemic.”
If we can assure the tourism industry that we can develop a plan benefiting inbound travel, it will attract more visitors, and I believe they would also support this initiative.
What kind of revenue could be generated from a tourist tax in London?
Authorities believe that implementing a levy could generate substantial funds for local services and the tourism sector.
For instance, if the UK were to adopt measures similar to those implemented in Paris—where tourists pay as much as €16 per night for upscale accommodations—or mimic Barcelona’s approach, which includes fees of around €4 nightly along with additional regional taxes, this could result in an extra £240 million being collected each year.
This is on the basis of adding a 5% tax to overnight stays, according to Euro Weekly.
Could London introduce a tax on its own?
To put it briefly, no. Local authorities in England aren’t permitted to implement their own tourist tax; such a measure must pass through Parliament instead. For this to occur, legislation would need to be submitted to Parliament.
Nevertheless, certain regions within the UK local authorities, such as
Manchester
and
Liverpool
, has set up Business Improvement Districts (BIDs) that encompass tourism-related enterprises.
These are legal exemptions, handled by regional bodies, allowing them to impose fees within their jurisdictions.
How might a tourist tax in London affect UK day trippers?
‘If London were to impose a tourist tax, it would probably be similar to the charge on overnight stays currently implemented in places like Manchester,’ says Shulka. So even though an overnight fee could be charged, day visitors are unlikely to be affected.
Like we mentioned earlier, to prevent
overtourism
, cities such as Venice have introduced charges for daily tourists. However, in London’s situation, Shulka suggests that the primary reason would likely differ, focusing more on raising money to enhance tourism infrastructure improvements and city services.
Shulka notes, “One reason day trippers usually avoid paying a tourism tax could be because they remain in the city for just a short period and thus utilize fewer public services than those who stay overnight. As these tourists do not reside in accommodations that require payment, they escape being taxed via standard methods.”
Ultimately, according to Shulka, day-trippers will only feel the impact if specific measures aimed at this group are put into place. These could involve initiatives such as tourist passes, entrance charges, or mandatory registration systems.
How have residents of London responded to the possibility of a new tax?
On Reddit, there’s a substantial debate regarding the concept of a tourist tax, with opinions varying widely as anticipated.
A number of residents in London support implementing a tax, arguing that they already pay it in various other European cities, so why shouldn’t it apply here as well? One individual further notes, ‘It’s surprising how many tourists aren’t aware that they actually don’t have to pay this tourist tax.’
‘Yes please. And then ring fence that money to go back into benefiting the local economy. Some new trains for the Bakerloo Line would be nice! Or some new cycle lanes,’ another says.
A Barcelona resident was also positive about a London tax: ‘As a tourist, I wouldn’t mind that extra fee.’ They continued, saying that their Spanish city has it, and ‘regardless of the real use of the money that it generates, it’s not a barrier for tourists.’
A fellow traveler concurs: “I would willingly pay this fee each time I go to London (and I aim to visit several times annually).”
Some expressed doubt, indicating their support contingent upon ensuring that the funds would directly benefit London residents. Others outright opposed it, arguing that since hotels are ‘already overpriced,’ making them even costlier wouldn’t be a solution.
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Reach out via email
ChinPaoLifestyleTeam@ChinPao.co.uk
.
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