London Mayor proposes potential tourist tax to boost public services and hospitality sector

Andrea Thompson

ByAndrea Thompson

June 4, 2025

Amid speculation surrounding a potential tourist tax for London, Mayor Sadiq Khan considers a nightly levy on visitors to fund public services and support the struggling hospitality sector.

London Mayor Sadiq Khan has sparked debate over the prospect of introducing a ‘tourism tax’ for visitors to the capital, with a proposed levy of £1-2 per night on accommodation, including hotels and short-term rentals like Airbnb. The move, aimed at providing much-needed financial support to local infrastructure and the hospitality industry, mirrors similar schemes successfully implemented across major European destinations such as Paris, Berlin, and Amsterdam.

Tourism has long been a vital contributor to the UK economy, generating billions in annual revenue. However, ongoing financial pressures—including post-pandemic recovery, rising national insurance contributions, and an increased minimum wage—have left the hospitality sector struggling. Some industry insiders view the proposed tax as a vital lifeline, offering funds to improve transport, street maintenance, and arts funding, which remains significantly lower than pre-2010 levels.

Penny Paddle, partner at law firm Spencer West LLP, highlights the dual impact of such a tax, noting both its potential benefits for local communities and the concerns within the hospitality sector. Critics worry that additional charges could deter budget-conscious travellers while increasing administrative burdens on businesses already facing economic strain.

Despite the discussion surrounding the initiative, the UK Government currently has no plans to implement such a policy. Whether London follows in the footsteps of European cities with a tourism levy remains uncertain, but the debate over balancing visitor contributions with economic sustainability is set to continue.

Andrea Thompson

ByAndrea Thompson

Andrea can be found either in the Travelling For Business office or around the globe enjoying a city break, visiting new locations or sampling some of the best restaurants all work related of course!