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Going to a gig? You’d expect to pay. Going to a club? Tickets on entry. Paying to enter your dream travel destination? Preposterous.
They were first introduced by certain governments to get a grip on over-tourism, with the extra income generation being a bonus to the measure. This fee collected from travellers usually goes towards maintaining the city and supporting local infrastructure.
In November 2025, the UK government announced plans to give mayors in England the power to introduce a tourist tax on overnight visitors, in line with other European cities.
Secretary of State for Housing, Communities and Local Government Steve Reed said at the time: “Tourists travel from near and far to visit England’s brilliant cities and regions. We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.”
With this in mind, London could soon see the implementation of a tourist tax.
New research suggests that this lucrative levy could contribute millions to the capital’s economy.
Westminster alone could raise around £95m due to a 3% tourist tax on the cost of a room, while boroughs like Camden and Tower Hamlets could also bring in around £20m each year.
Here’s what it might look like.
How does a tourist tax work?
Tourists taxes are typically added to accommodation costs or tourist services and usually amount to the equivalent of £1 to £5 per night, but can vary.
It would be wrong to think of tourist taxes as a deterrent. Instead, they are used to manage the consequences of over-tourism. Michael Corrigan, CEO of Trtl Travel, explains that the money is usually put to good use by the local government. Uses can include anything from “sprucing up parks, keeping streets clean, or making sure that local tourist attractions are kept in top-notch condition.”
He adds: “If you’re using local services and enjoying public spaces, tourist tax is a small way of contributing to keeping those amenities in tip-top condition.”
What are the pros and cons of a tourist tax?
Corrigan points out that cheap flights have made travelling extremely accessible to the masses. However, the downside of this is the effects and consequences of over-tourism.
For residents, overtourism can lead to environmental damage, strained infrastructure, and an overall reduced quality of life.
A tourist tax would help to generate funding to mitigate the negative consequences of this. George Levett at Conveyancing Solicitor says that a tourism tax can ensure that tourism remains sustainable and does not overly burden residents of the local environment.
However, he adds that there is always a possibility that increased accommodation costs would deter budget travellers and inconsistent application across London’s boroughs could complicate enforcement and impact local rental markets.
With that said, Darijo Saric, CEO of VIP Holiday Booker said that in Dubrovnik, Croatia, visitors have not been deterred with the city often being described “as the busiest European city during summer.”
How successful has it been for other popular cities?
Major cities such as Barcelona, Paris, and Amsterdam have experienced success with such taxes. Managing the impact of large numbers of tourists has been far easier with the additional income.
For instance, Paris charges tourists up to €16 per night in premium hotels and Barcelona chares around €4 plus a regional fee. Fees like this generate around £240 million annually for the cities.
Others have argued that comparatively, tourist taxes do very little and cities should look to the core issues of over-tourism to solve the problem. For example, better regulating AirBnB, focusing on effective visitor management, diversifying tourism so that it is not concentrated in one area, and offering seasonal pricing.
Saric adds that encouraging tourists to explore areas of Britain outside of London could help to make London less crowded and grow British tourism in general.
Already, Manchester, Liverpool, and Edinburgh have implemented measures to establish Business Improvement Districts. This is a levy similar to a tourist tax.
Will London introduce a tourist tax?
London’s tourist tax is still under discussion and could become a likely possibility, says George Levett at Conveyancing Solicitor.
“While not imminent, a tourist tax in London remains a plausible measure to balance the city’s vibrant tourism economy with the quality of life for its residents and long-term urban sustainability,” he added.
Levett said: “From a legal and property perspective, the introduction of a tourist tax in London would require comprehensive coordination between the Greater London Authority, local borough councils, and hospitality stakeholders. Implementation would likely involve regulations governing how accommodation providers collect and remit the tax, ensuring transparency and compliance.”
At the moment, it’s unclear how much a tourist tax inn London would be.
The UK Government has said it would be up to “mayors and other local leaders to introduce a modest charge if it’s right for their area”.
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