(London) The British government is exploring authorizing local governments in London or other cities to levy a tourism tax on overnight visitors. London has cautiously welcomed the idea.
According to the BBC, London Mayor Sadiq Khan has been actively advocating for the central government to delegate this authority, allowing local governments to collect tourism taxes.
It is estimated that a tourism tax in London could generate up to £240 million (nearly S$410.9 million) in revenue annually. In 2024, London received 89 million overnight visitors.
Among the G7 members, England is the only country that prohibits local governments or mayors from levying tourism taxes.
Scotland and Wales have recently levied taxes on overnight visitors in different forms. Scottish local governments can set tax rates based on daily accommodation bills, while Welsh local governments will levy a tourism tax of £1.30 per night from 2026.
Further Reading
According to a survey report released last week, three types of tourism taxes are commonly found in major G7 cities—Paris, Munich, Milan, Toronto, New York, and Tokyo. In France and Italy, however, the amount of the tourism tax depends on the hotel's location, type, and official "star rating."
The report's authors argue that a percentage or fixed fee system is more suitable for London because the UK "does not have a national hotel star rating system like France and Italy."
The report concludes that if London's tax rates were comparable to those of other major cities, a significant drop in tourist arrivals is unlikely, as research shows that tourists are less sensitive to taxes in more popular tourist destinations.
