Tourist tax plans will be ‘hugely damaging’, warn holiday firms

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Plans to give England’s mayors the power to impose tourist taxes will be “hugely damaging” and hit British holidaymakers hard, hotel and tourism firms have warned.

Premier Inn owner Whitbread and Butlin’s are among major businesses to criticise the plans and have urged the Labour Government to rethink the policy.

Later on Thursday, the Government is expected to unveil plans which will allow local leaders to charge a levy on the cost of accommodation to overnight visitors.

It is understood the levy would have no upper limit, though Government sources said mayors were unlikely to make it too costly, with most indicating it would be a few per cent.

Premier Inn owner Whitbread has said the plans could undermine the sector’s ability to create jobs and invest (Steve Parsons/PA) (PA Archive)

But hospitality chiefs have warned they believe the uncapped proposals could cost the UK hospitality and tourism industry as much as £1.6 billion.

Industry group UKHospitality claimed it believes “33,000 people could lose their jobs as a result of this tax”.

Plans for the tax were first announced under Sir Keir Starmer following similar schemes introduced by the devolved administrations in Scotland and Wales.

Charges of a similar nature already exist across Europe, with the revenue used to fund local services. Local leaders would decide how to invest the money raised from the levy.

However, businesses have said the move would directly hit holidaymakers and could harm tourist hotspots and resorts.

Jon Hendry Pickup, chief executive of Butlin’s, said: “Big cities may welcome these mayoral powers, but treating every destination and hospitality business the same will leave resorts like ours to shoulder the burden.

“Giving mayors the power to impose a levy without a national upper limit takes those concerns to another level and risks making family holidays less affordable, damaging demand and making it harder for businesses to hire young people.”

A spokesman for Whitbread said: “This is hugely damaging for hospitality, which is a key pillar of the UK economy and where many of our young people get their first job.

“Measures like this risk undermining the industry’s ability to invest, create jobs and support economic growth.”