‘Significant safeguards’ must precede visitor levy introduction, inquiry reveals

The All-Party Parliamentary Group (APPG) for Hospitality and Tourism has called for “significant safeguards” to be introduced before applying a visitor levy on overnight accommodation.

 

It comes after the APPG published the findings of its inquiry into the government’s proposed visitor levy on hotels, hostels and short-term lets across England, which was confirmed in the King’s Speech earlier this year.

 

The inquiry involved evidence sessions and written submissions from stakeholders including UKHospitality, the Confederation of British Industry, BusinessLDN, UKinbound, the Local Government Association, the Tourism Alliance and major tourism businesses such as Merlin Entertainments, Parkdean Resorts and Forge Holiday Group.

 

Recommendations from the APPG featured a comprehensive assessment of the cumulative tax burden on hospitality businesses and a reduction in hospitality VAT to 10% before any visitor levy is introduced.

 

The APPG also called for a consistent national framework to avoid discrepancies between local schemes and a strict and transparent ringfencing of any levy revenues for tourism and destination purposes.

 

A minimum 12-month implementation period should be given for impacted hospitality businesses, the APPG added.

 

According to research presented to the inquiry, a 5% visitor levy could reduce tourism spending, investment and employment, especially in coastal and rural destinations, while increasing costs for holidaymakers.

 

There was a “slight divergence of opinions” in the form the levy should take, with the APPG addressing the flaws of both a percentage and per person per night model. The organisation concluded a “per unit model with some in-built tiering” would be fairest.

 

Chris Webb, MP for Blackpool South and chair of the APPG, said: “If the government chooses to proceed with the levy, it must be designed with fairness, consistency and genuine engagement with the industry.

 

“These findings set out how any future levy should work for communities, visitors and businesses alike, while ensuring the essential safeguards are in place to protect jobs and economic growth. I hope the government will give serious consideration to the recommendations in this report and learn from its findings.”

 

Allen Simpson, chief executive of UKHospitality, added: “These findings send a clear message to government. A visitor levy would have ramifications across the hospitality ecosystem, affecting jobs, growth and the vibrancy of our towns and high streets. Visitor spending supports pubs, restaurants, attractions, cultural venues and thousands of local businesses and jobs across the country.

 

“The evidence gathered by this enquiry shows that introducing a new tax without the right safeguards risks increasing the cost of family holidays, reducing visitor demand and undermining investment at a time when businesses are already under significant pressure.

 

“There is an urgent need to consider the unintended consequences of a visitor levy and the practical recommendations set out in this report to mitigate its impact. If government chooses to proceed, it must address the sector’s wider tax burden, establish a consistent national framework and ensure revenue is transparently reinvested in growing the visitor economy.”

 

The APPG will share its findings and recommendations with the government as it considers its response to the consultation on the proposed introduction of visitor levy powers in England.

 

The consultation on government giving mayoral strategic authorities in England the power to create overnight visitor levies was launched in November 2025, while the APPG inquiry was launched this May.

 

Last week, Edinburgh became the first city to introduce a comprehensive, council-enacted visitor levy in the UK, as guests staying in overnight accommodation across the Scottish capital will be subject to a 5% visitor levy.

 

The full list of stakeholders consulted in the process of evidence gathering by the APPG are below:

• Awaze 
• British Beer and Pub Association (BBPA)
• Blackpool Tourism Limited
• BusinessLDN
• Business Travel Association (BTA)
• Confederation of British Industry (CBI)
• Forge Holiday Group (FHG)
• Greene King
• Haven
• Hotelverband Deutschland (IHA)/the German Hotel Association (GHA)
• Merlin Entertainments
• Online Travel UK (OTUK)
• Oxford Economics
• Pitchup
• Parkdean Resorts
• The Local Government Association (LGA)
• Thurlestone hotel
• Professional Association of Self-Caterers (PASC)
• Short Term Accommodation Association (STAA)
• The Tourism Alliance
• UKHospitality
• UKinbound