London reportedly set to introduce a 'tourist tax' for travellers

London is moving toward introducing a levy on overnight stays in hotels and short-term rentals like Airbnbs, after a cross-party Greater London Authority committee recommended the measure, as per reports. Estimates from the Centre for Cities suggest the new charge could generate as much as £240 million annually.

London's new tourist tax might affect travellers

The proposed approach for London would mirror Scotland’s percentage-based system. According to the BBC, the plan involves a 5% charge on typical accommodation prices, which would work out to roughly £11.50 per night for hotel stays and about £10 per night for Airbnbs. In Edinburgh, a similar 5% visitor levy—starting next July—will apply only to the first five nights of a booking.

Many major global cities already impose tourist taxes. New York City collects around £493 million a year through its program, and Tokyo’s fixed fee on all accommodation bookings brings in £35 million. In France and Italy, the amount varies based on factors such as property type, star rating and location.

Andrew Carter, chief executive of the Centre for Cities, said, “The model the government should adopt is already underway in Scotland, where Edinburgh, Glasgow and Aberdeen are introducing levies valued at a percentage rate on overnight stays in hotels, B&Bs and short-let accommodation.”

He added, “Hopefully, introducing a tourist levy is the start of a bigger programme of devolving tax and spending powers to the capital. London is the most productive big city in the UK, and devolving more fiscal powers would give the capital more policy tools to accelerate growth in the economy.”

At present, England is the only G7 nation where the central government prevents local councils from introducing tourism taxes.

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