London Weighs New Tourist Tax for Hotel Guests
London is contemplating the introduction of a new tax aimed at hotel guests. Mayor Sadiq Khan is reportedly considering levying this tax on hotel stays as well as short-term rentals.
A spokesperson for the Mayor’s office mentioned, “The mayor has stated it clearly. Similarly to other major cities, a modest tourist tax is under consideration.” They added that this tax “would result in higher taxes overall” but would help boost the economy and strengthen London’s status as a prime destination for both tourism and business.
In recent years, London has remained a favored destination, attracting about 21 million visitors, including approximately 3.6 million from North America who stay overnight.
This potential tax arises from the UK Decentralization and Community Strengthening Bill, which contains provisions that could allow local authorities to “generate additional revenue via a new guest tax.”
While no specifics have been officially released, many speculate that the tax could be around 5% per night.
Andrew Carter, the CEO of the Center for Cities, expressed concerns, stating that introducing such a tax could mark the beginning of a broader issue by shifting fiscal authority to the capital. He noted, “London is the UK’s most productive city, and handing over more financial power will provide the city with additional tools to drive economic growth.”
Interestingly, London recently initiated a campaign called ‘Mind the Grab’ aimed at alerting pedestrians to the risk of mobile phone thefts. Bold purple signs along sidewalks read “Beware of Grabbing” and “Stay Off the Curb! Cell Phone Snatching Hot Spot.”
The conversation around this tourist tax emerges as many European cities deal with challenges related to overtourism.
For instance, Greek officials plan to impose a $22 tax on cruise visitors to popular islands like Santorini and Mykonos. Additionally, Aberdeen, Scotland, has approved a 7% tourist tax to begin in 2027, and Edinburgh is set to implement a similar tax starting in July 2026. Norway has also created a structure for a 3% tourism tax in specific areas heavily impacted by tourist activity. Meanwhile, Venice introduced a pilot program to charge day visitors a fee of about $5.17, with plans to increase this tax being considered.
