British officers estimate {that a} 5 per cent vacationer tax might generate €285 million yearly for London.
Barcelona, Berlin, Paris, Prague and Venice. Quickly, London could possibly be added to the rising record of European cities charging a tax on vacationers.
Talking at certainly one of London’s 10 annual Mayor’s Query Time assemblies this week, metropolis mayor Sadiq Khan expressed help for a levy on guests to the UK capital. Vacationers “don’t actually thoughts paying the additional few euros” to vacation elsewhere, he defined.
However whereas some cities throughout Europe have efficiently carried out vacationer taxes, their impression hasn’t at all times been simple. Some argue they’re important for sustaining tourism infrastructure, however others fear they might deter guests in the long run.
Might a London vacationer tax strike the correct stability?
How a lot do vacationer taxes generate – and the place does the cash go?
Throughout Europe, vacationer taxes have turn into a preferred supply of fundraising for cities struggling to handle overtourism and pay for public companies.
InBarcelona, for instance, guests at the moment pay as much as €4 per evening, on prime of a regional tax. These hefty charges generate plenty of cash for the town – as much as €100 million yearly – which fits to sustaining infrastructure, enhancing public transport and preserving historic websites.
Paris fees guests as much as virtually €16 an evening to remain in its most costly accommodations, producing tens of millions of euros every year to help cultural tasks and concrete upgrades.
If London follows go well with, a levy might increase important sums. Official estimates recommend a 5 per cent tax on in a single day stays might generate almost £240 million (€285 million) yearly.
Whereas no formal plans have been outlined, Khan has stated that cash would help the tourism and hospitality sectors.
“My promise to the accommodations and AirBnbs and so forth is the cash could be used to enhance the atmosphere round that, to encourage extra vacationers,” he stated.
Might a London vacationer tax harm its hospitality sector?
Because the charges proceed to rise, critics have questioned their impression.
The Barcelona Resort Affiliation instructed native media in February that the ever-growing tax – in 2025, a keep in afive-star lodge might price an additional €15 per evening, plus VAT – amounted to the ‘fiscal asphyxiation’ of one of many metropolis’s most essential sectors.
Venice this 12 months is ready to double its tax on day-trippers and short-term guests from €5 to €10. Whereas the tax netted the town €2.2 million in 2024, officers famous it did little to dissuade the type of tourism that has clogged the town’s public areas and squeezed out locals.
Earlier this 12 months, companies throughoutWales closed their doorways on St David’s Day to protest a proposed tax. Opponents argued that it will make Wales much less aggressive at a time when tourism-dependent companies have been nonetheless recovering from pandemic losses.
In London, the place lodge costs are already among the many highest in Europe, the introduction of an extra cost could possibly be a sticking level. With tourism hovering simply above pre-pandemic ranges – VisitBritain estimated 41.2 million inbound visits in 2024, up just one per cent from 2019 – some concern a tax might discourage budget-conscious travellers.
Tourism commerce group UKHospitality instructed UK newspaper The Normal that extra taxes could be ‘extraordinarily damaging.’
Will London be a part of the ranks of tax-charging cities?
Final 12 months in Europe was marked by a procession of anti-tourism protests. FromAmsterdam to the Canary Islands to Greece, locals took to the streets to voice frustrations over the ceaseless improve in guests and the impression the trade has had on housing, healthcare and different public companies.
Tourism taxes have but to stem the tide of holiday makers, however they’ve generated tens of millions for cities struggling to maintain a lid on them. With main European locations already cashing in on these taxes, London’s personal levy could really feel inevitable.
However whether or not it succeeds would possibly rely upon how it’s framed – both as a vital software to help native infrastructure or as an unwelcome additional price for travellers.
As the controversy unfolds, one factor appears sure: the dialog round London’s tourism financial system centres on greater than an ‘additional few euros.’
