A new charge on overnight stays could be coming to parts of England. For hotels, B&Bs and campsites, the impact could go well beyond the cost of the levy itself.

The government is proposing to give Mayoral Strategic Authorities in England the power to introduce an overnight visitor levy on stays in accommodation.

It would not automatically apply across the country. Individual areas would decide whether to introduce one, within rules set by the government.

UKHospitality is campaigning against the proposal, calling it a “holiday tax” and warning that it could push up the cost of holidays and put further pressure on hospitality businesses.

And this isn't just a theoretical debate. Scotland and Wales are already putting their own visitor levy systems in place, giving businesses elsewhere an early look at how they could work.

Scotland and Wales are already moving

Edinburgh is due to introduce Scotland's first visitor levy in July 2026, with Glasgow following in January 2027 and Aberdeen in April 2027.

Scotland's system allows councils to introduce a levy locally, with the money raised intended to support tourism and related local services.

Wales has also passed legislation allowing councils to introduce a visitor levy. Cardiff has announced that it will introduce one from 1 April 2027, making it the first Welsh council to do so.

Under the Welsh system, most overnight visitors will pay £1.30 per person per night, with a lower rate of 75p for adults staying in hostels and campsites.

For businesses in England, these schemes offer an early look at how visitor levies could work in practice, from collecting the money to dealing with the extra administration.

The levy could cost businesses more than the charge itself

The obvious option for a hotel or B&B is to add the levy to the customer's bill.

But hospitality is a competitive market. Customers look at the total price of a stay, so adding a new charge could affect where they book, how long they stay or how much they spend once they're there.

UKHospitality's own polling found that 18% of people surveyed said an increase in the cost of a holiday in England from the proposed tax would stop them booking one. It also found that 73% said a holiday tax would either stop them holidaying in England, reduce the number of trips they take or reduce what they spend while away.

These are UKHospitality's polling results, rather than a forecast of what every business will experience. But they show why simply passing the cost on to customers may not be the whole story.

The other option is to absorb some or all of the cost, which would put pressure on already tight margins.

The impact could go beyond bookings

UKHospitality commissioned Oxford Economics to model the potential impact of different levy scenarios.

Under its 5% levy scenario, the modelling estimated that tourism spending could be £1.8 billion lower and that there could be 33,000 fewer jobs by 2030. It also modelled a fall in the number of nights spent in accommodation.

For individual businesses, though, the point is clear: the financial impact isn't necessarily the value of the charge itself. If a levy affects demand, even a small change in bookings could have a much bigger effect on revenue.

There is an admin cost too

Collecting a visitor levy also means another process for accommodation providers to manage.

The government's consultation has looked at issues including who would collect the charge and how businesses would account for it.

Wales is already showing how this could work. The Welsh Revenue Authority will collect and manage the levy, with accommodation providers responsible for paying it over. A national register of visitor accommodation providers is also being created.

For a large hotel group, that may be relatively straightforward.

For an independent B&B where the owner is already handling bookings, payroll and accounts, another reporting process takes time - and time has a cost.

What can businesses do now?

There is no need to start changing prices yet. The English levy would not automatically apply everywhere, and the final rules will depend on how the policy develops and whether a local authority chooses to introduce one.

But businesses can start by getting a clear picture of their finances.

That means knowing what an average booking actually earns, how much room there is in the margin and what would happen if an additional cost had to be absorbed.

It is also worth modelling what passing the charge on and seeing what a small drop in bookings would do to revenue.

Having those figures to hand means a business can respond quickly if a levy is introduced locally.

UKHospitality wants a different approach

UKHospitality is calling for the proposed levy to be dropped and has put forward an alternative called a “Holiday Bonus”.

The proposal would link funding to the number of visitors attracted to an area, with the aim of encouraging tourism and spending rather than adding another charge to overnight stays.

Whether that alternative is taken forward remains to be seen.

For hospitality businesses, the more immediate issue is understanding what a visitor levy could mean for their own finances.