Warning from the World Travel & Tourism Council (WTTC) over potential losses in visitors, tourism revenues and investment – Estimated loss of up to £14.4 billion in international visitor spending under a £10 charge scenario
The United Kingdom risks becoming a less competitive destination in the international tourism market if the new overnight charges are introduced without a cap, warns the World Travel & Tourism Council (WTTC).
The warning comes after the British government’s decision to give mayors in England and other local authorities the power to impose an accommodation tax on visitors, without a national cap on the level of the charge.
The new tax will apply to stays in hotels, short-term rental accommodation, bed & breakfasts and other forms of tourist accommodation, with the amount calculated as a percentage of the cost of the stay.
One in three is considering an alternative destination
According to a WTTC survey published earlier this year, 29% of travelers from the three largest inbound tourism markets for the United Kingdom – the US, France and Germany – would consider choosing another destination or even not taking the trip if an accommodation tax of €10 were imposed.
British travelers appear to be even more sensitive to the issue. 39% of UK residents said they would consider taking a holiday outside the country or not taking a holiday in the United Kingdom if they were charged a £10 fee.
The WTTC estimates that, under such a scenario, the decline in international visitor spending could reach £14.4 billion in 2027, highlighting the scale of the potential economic impact of what may appear to be a limited additional charge.
“The United Kingdom must become easier, not more expensive, to visit”
WTTC President and CEO Gloria Guevara stresses that the issue is not only the size of the tax, but the overall competitiveness of the UK tourism product.
“The United Kingdom should make it easier, not more expensive, to visit the country. Travelers have choices and, if the United Kingdom becomes less competitive, they will move their spending elsewhere,” she said.
As she noted, the higher cost could lead to lower tourism spending, weaker growth and fewer opportunities for workers and businesses that depend on tourism.
“The government should focus on maintaining the United Kingdom’s attractiveness and competitiveness as a destination. If we make it more expensive to visit, we risk losing the very visitors whose spending supports local economies across the country,” she added.
Fears over a “fragmented” tourism product
For the WTTC, the main risk is not limited to the immediate cost of the tax. The Council warns that the simultaneous introduction of different charges in individual areas could lead to a more expensive and fragmented tourism environment.
This comes at a time when cities and countries around the world are competing intensely to attract visitors, tourism spending and new investment.
The WTTC argues that travelers can easily turn to competing destinations if they see a significant difference in the overall cost of a trip.
The wider economic impact in focus
Tourism is an important pillar of the British economy, supporting millions of jobs and generating economic activity across a wide range of sectors, from hotels, restaurants and attractions to retail, transport and local businesses.
The WTTC points out that the industry is already facing significant pressures on operating costs, while the UK’s price competitiveness remains a long-standing challenge.
Against this backdrop, the Council calls for any policy that increases the cost of travel to be assessed not only on the basis of the direct tax revenue it may generate, but also on the basis of its impact on demand and the tourism sector’s overall economic contribution.
The previous government framework
The British government itself had recognized, as part of a previous consultation, the importance of keeping the tax at affordable levels, as well as providing stability and predictability for businesses in the hospitality sector.
The consultation had also noted that certain restrictions on local decision-making could act as a safeguard against excessively high charges, which could negatively affect visitor numbers.
The WTTC therefore calls on the government and local authorities to ensure that accommodation taxes remain proportionate, predictable and designed with the United Kingdom’s international competitiveness in mind.
At the same time, it calls on policymakers not to focus exclusively on the immediate revenues generated by the charge, but to take into account the overall economic value created by visitors through their spending, support for local businesses, employment and investment.
