New research from the World Travel & Tourism Council has put a stark economic figure on the UK government’s proposed overnight visitor levy – and the number demands serious attention from every hospitality employer and HR leader in the country.
Published on 17 February 2026, the day before the government’s consultation closed, the WTTC study estimates that a €10 daily visitor tax could strip £14.4 billion from the UK economy in 2027 alone. The research – conducted by polling agency GSIQ among 2,502 respondents across the UK’s three largest inbound source markets between 7 and 11 February – found that 29% of visitors from the US, France and Germany would consider alternative destinations or abandon their UK trip entirely if such a levy were introduced.
The WTTC’s intervention lands at a critical policy juncture. The UK government’s consultation on whether to grant Mayoral Strategic Authorities in England the power to introduce local overnight visitor levies – run jointly by the Ministry of Housing, Communities and Local Government and HM Treasury – formally closed on 18 February 2026.
Domestic demand at equal risk
The research reveals that British travellers are, if anything, more sensitive to the proposed levy than international visitors. Some 39% of UK residents said they would consider holidaying elsewhere or decide against a domestic break altogether if a £10 visitor tax applied. Families face an acute pinch: 42% of international respondents and 46% of British respondents described the levy as a “big” or “very big” problem when travelling with children.
For hospitality employers, this matters as much as the inbound tourism figure. Domestic leisure spend sustains a disproportionate share of seasonal and part-time hospitality roles – particularly in regional destinations outside London that have fewer international visitors to absorb any shortfall.
“Billions of pounds will be wiped from the UK economy, leading to much higher unemployment, especially among small shops, restaurants and suppliers to the hospitality sector,” said WTTC President and CEO Gloria Guevara.
A sector already losing ground globally
The WTTC’s warning arrives as the UK is already underperforming against global benchmarks. Global Travel & Tourism GDP is forecast to have grown 6.7% in 2025; the UK’s equivalent growth is estimated at just 4.3% – running 36% below the global average, according to WTTC data. The sector supports approximately 4.5 million jobs in the UK, equivalent to roughly one in eight positions nationwide.
Against that backdrop, a policy that demonstrably reduces visitor volumes carries significant workforce risk. The WTTC frames the potential employment impact as a “domino effect” – with frontline hospitality job losses cascading into the SME supply chain of food producers, transport operators, cleaning contractors and retail businesses that depend on visitor footfall.
The policy landscape
The proposed English framework is not a national tourist tax but a devolution measure. Under the government’s plans, regional mayors would have discretionary power to introduce per-night charges on paid accommodation in their areas, subject to local consultation and a minimum 12-months’ notice period. Revenue would be directed towards transport, infrastructure and the local visitor economy.
Several mayors have indicated strong support. London Mayor Sadiq Khan called the development “great news for London.” Manchester Mayor Andy Burnham argued a levy would “sustain good growth over the next decade,” while Liverpool Mayor Steve Rotheram pointed to Barcelona and Paris as cities generating tens of millions annually through similar schemes.
Industry opposition has been equally pronounced. A coalition of more than 200 hospitality and leisure business leaders – including executives from Travelodge, Hilton and Butlin’s, coordinated by trade body UKHospitality – wrote an open letter to Chancellor Rachel Reeves warning that the levy would make UK trips unaffordable for working families. The letter highlighted an additional structural disadvantage: UK accommodation already attracts a 20% VAT rate, roughly double that applied in France, Spain and Portugal.
Accounting body ICAEW has separately cautioned against a fragmented approach, warning that allowing mayors to design their own schemes risks creating “a patchwork of different rules that burdens national businesses and delays revenue collection.” ICAEW has called for a single national framework that local authorities could adopt, rather than building competing systems from scratch.
What comes next
The consultation has closed, but the policy timeline remains open. Under the proposed rules, any mayor choosing to introduce a levy must first run a local public consultation, publish a prospectus detailing rates, exemptions and revenue use, and provide accommodation providers with at least 12 months’ notice. The earliest any English levy is likely to take effect is 2027 – the same year the WTTC projects its £14.4 billion impact.
For HR and workforce leaders in hospitality, the coming months will require close attention to local mayoral decisions, particularly in major city regions. The difference between a well-designed, transparently communicated levy and a poorly structured one could prove decisive for recruitment planning, wage cost modelling and the long-term investment case for staffing up in affected regions.
