Support for a tourist tax in London gains momentum
Sir Sadiq Khan has publicly endorsed the idea of a tourist tax for London, potentially charging overnight visitors an additional fee for each night they spend in the city.
This type of levy is already implemented in several European capitals including Paris, Berlin, and Amsterdam, where it is typically added to a traveler’s hotel bill at the end of their stay.
Currently, no local authority in England has the authority to impose a straightforward tourist tax without government approval. However, city councils in Manchester and Liverpool have recently introduced a variant of a tourism levy using a legal workaround.
Last October, the mayor mentioned to the Local Democracy Reporting Service that he was “happy to consider” the feasibility of such a charge for London as he monitored relevant evidence following discussions at the Centre for London think tank’s annual conference.
This week, during Mayor’s Question Time, Sir Sadiq expressed clearer support for the proposal after being prompted by Labour Assembly member Bassam Mahfouz. Mahfouz pointed out other cities like Tokyo, Lisbon, Barcelona, Prague, and New York City that have already implemented tourist taxes.
“Isn’t it time for London to have that same power?” he asked.
Sir Sadiq responded: “The fact is, many of us visit those cities and don’t mind paying an extra few euros as part of a tourism levy. I believe the Government should empower us to introduce an accommodation tax. I assure hotels and Airbnb establishments that the revenue would be used to enhance the local environment, thereby attracting more tourists.”
He emphasized the importance of ensuring that the funds raised would benefit the local area instead of being allocated elsewhere, which would be unfair. “It’s crucial to provide this reassurance to the sector, especially after their struggles following the pandemic. If we can show that a scheme would attract more visitors, I believe they would support it.”
Mr. Mahfouz responded positively, saying, “Thank you, mayor, for your reassurance. Clearly, if it works well in cities like Paris and New York, it could also succeed here.”
At the Centre for London conference in October, representatives from all major political parties in the city expressed their support for the tourist tax. Kim Taylor-Smith, deputy leader of Kensington and Chelsea’s Conservative Council, called it a “no brainer,” while Hina Bokhari, leader of the Lib Dem group at City Hall, expressed her strong support.
However, UKHospitality, a trade organization representing the sector, cautioned that additional taxes could be “extremely damaging.”
The growing support for a tourist tax in London reflects a potential shift in how the city seeks to manage its tourist influx while ensuring funds are invested back into local services and infrastructure. As Sir Sadiq Khan pointed out, many major cities worldwide successfully implement such taxes, and visitors generally accept the added cost when they see tangible benefits in their surroundings.
It is noteworthy that a common concern among stakeholders, including hotels and hospitality businesses, revolves around the impact of additional taxes on the sector which has already faced significant challenges in the wake of the pandemic. However, if there is clear communication on how the funds will be utilized to enhance the visitor experience and support local businesses, there may be a stronger case for acceptance.
The idea of earmarking the revenue specifically for improvements that benefit tourism—such as better public transport, cleaner streets, and enhanced safety measures—could help alleviate concerns from industry representatives like UKHospitality. If approached transparently, this could enhance not just the visitor experience but also the overall appeal of London as a prime travel destination.
As the conversation around a tourist tax evolves, it will be crucial for city leaders to maintain dialogue with all stakeholders to craft a policy that works for both the visitors who enjoy the city and the local businesses that sustain it. Ultimately, the success of this initiative will depend on public support and effective management of the funds generated.