For generations, London has been one of the world’s great visitor destinations: open, dynamic, culturally unmatched and globally connected.
Tourism is not simply a welcome addition to the UK economy. It is one of its most important industries, supporting millions of jobs, driving investment and sustaining the businesses that give our cities energy and identity.
That is why the government’s decision, announced in this week's King's Speech, to press ahead with plans allowing local authorities to impose a new overnight levy on tourist accommodation is so concerning.
At a time when Britain should be doing everything possible to strengthen its international competitiveness, ministers risk sending precisely the wrong message to visitors and investors alike: that coming to the UK will cost more.
Supporters of overnight levies often argue that such charges are common internationally. This is true. Cities from Amsterdam to Dubai have implemented tourism-related charges.
But context matters. Successful visitor economies do not simply impose taxes; they reinvest visibly and strategically in the visitor experience. Clean streets, safer public spaces, world-class events, late-night transport and cultural programming all help justify additional charges.
The question is not simply whether the UK should introduce a levy. It is whether the proceeds will genuinely strengthen the tourism offer and whether businesses will have meaningful influence over how that money is spent.
Too often, policy affecting hospitality and tourism is developed without sufficient engagement with the businesses that operate on the front line of the visitor economy. Hotels, restaurants, retailers, theatres and attractions are not passive stakeholders – they are the things that create the appeal of a destination in the first place.
Since the removal of VAT-free shopping for overseas visitors, London has lost ground to cities including Paris, Milan and Madrid in attracting high-spending international tourists. Hotels, retailers, restaurants and theatres continue to grapple with rising operational costs, economic uncertainty and changing visitor behaviour. Adding another charge to accommodation bills risks further undermining a sector that remains vital to the UK economy.
Tourism is one of the few sectors where perception matters enormously. International visitors have choice. They compare value, experience and welcome across global cities. While a relatively small overnight charge may appear insignificant in isolation, it risks contributing to a broader narrative that the UK is becoming more expensive and administratively burdensome for visitors.
That should concern anyone serious about economic growth.
At Heart of London Business Alliance, representing businesses across the city's most famous districts, including Piccadilly Circus, Leicester Square and St James’s, we fully recognise the pressures facing local authorities and the importance of investing in public spaces, transport, safety and cleanliness. Successful destinations require continual investment.
But the answer cannot simply be to ask visitors and hospitality businesses to shoulder ever greater costs.
The UK already generates enormous tax revenue from tourism through VAT, business rates, employment levies and wider economic activity. Before introducing new levies, the government should focus on improving the overall competitiveness of the tourism economy and supporting growth in visitor numbers and spending.
If ministers insist on moving forward with this policy, businesses must have a formal and meaningful voice in how funds are invested locally. Revenue should be hypothecated and deployed where it is raised. It should be transparently directed towards measures that directly enhance tourism, including public realm improvements, cultural events and safety initiatives.
But fundamentally, Britain should be asking a bigger question: do we want to encourage tourism growth or tax it further?
The UK possesses unmatched advantages: heritage, creativity, culture, hospitality and global influence. London remains one of the world’s most iconic destinations, open to all. Yet policy decisions increasingly risk weakening the sectors that drive international appeal and economic activity.
Tourism should be treated as a strategic national asset, not a convenient source of additional taxation.
At a moment of intense global competition for visitors, Britain should be making it easier, more attractive and more rewarding to visit our cities – not more expensive.
