The cost of tourism: What UK hosts need to know about new visitor taxes and levies

1. What are visitor taxes and how are they emerging in the UK

Visitor taxes (aka tourist taxes or accommodation levies) are charges added to overnight stays, applied by local authorities or via Business Improvement Districts (BIDs). They’re relatively new in the UK but gaining traction. For example:

• Manchester became the first UK city to introduce a “city visitor charge” of £1 per night, per room/unit in the city‑centre accommodation BID from 1 April 2023.
  
  

• The scheme is expected to raise around £3 million annually for the city’s accommodation sector development.
  
  

• Scotland’s legislation enables local councils to apply a visitor levy; for instance, Edinburgh plans a 5% per‑night surcharge on overnight stays from July 2026, covering hotels, short‑lets, aparthotels and guest houses.
  
  

• Welsh councils are also empowered to introduce visitor levies: a £1.30 per‑person, per‑night fee has been approved for Wales under the Visitor Levy Bill.
  
  

• BIDs in England (such as in Liverpool) apply levies based on the property’s rateable value (for example 1.6 % of RV rising to 4.5 %).
  
  

These examples show the direction of travel: while a national tourist tax is not yet universal in England, local levies are increasingly likely - and hosts in tourist‑intensive areas should plan accordingly.

2. How visitor levies could impact profitability for holiday‑let hosts

When a visitor tax or host‑charge comes into force, it impacts your cost structure, which in turn may reduce your net earnings unless you adjust strategy. Key effects include:

• Increased accommodation cost for guests, which may reduce demand unless value is clear. A charge of £1–£2 per night may seem small, but it adds up across high volumes or lower‑margin periods.
  
  

• Pressure on nightly rates: if you absorb the cost entirely, your margin falls; if you pass it on entirely, you risk deterring price‑sensitive guests.
  
  

• Different impacts depending on stay length: longer stays often spread fixed costs across more nights, but a levy per‑night erodes this advantage.
  
  

• Administrative complexity: you may need to collect the levy, remit it, adjust listing fees and communicate transparently to guests.
  
  

• Location‑specific risk: Properties in hotspot destinations (city‑centre, visitor heavy) are more exposed than those in less taxed locations.
  
  

Unless you factor levies into your pricing and strategy from the outset, your revenue could shrink or your bookings may suffer.

3. How hosts should respond: pricing, availability and communication

With the potential for new levies, here are actionable strategies for hosts to protect profitability:

Pricing strategy

• Review your cost base and include any anticipated visitor tax per‑night in your rate calculations.
  
  

• Use your nightly base rate + levy = total cost to guest. Decide what portion you absorb and what you pass on.
  
  

• For stays of a week or more, consider flattening the cost by bundling the levy within a single discounted long‑stay rate, rather than adding a visible surcharge each night.
  
  

• Monitor your competitors in the same location and see how they handle any visible levy; staying competitive is key.
  
  

• Use dynamic pricing that can adjust quickly if a levy is introduced mid‑season or new legislation changes your cost model.
  
  

Availability strategy

• Open your availability earlier for extended stays (which help spread fixed costs).
  
  

• Consider boosting stay‑length minimums in peak periods if shorter stays would result in lower margin once levy is included.
  
  

• Use booking platforms that allow fee transparency: show the total cost including any levy, to avoid guest disappointment or cancellations when they arrive.
  
  

Guest communication

• Be transparent about any fee or levy that affects the booking cost; hidden charges harm guest satisfaction and reviews.
  
  

• Frame the levy positively: e.g., “a small visitor charge helps maintain local services, clean streets and tourism infrastructure”.
  
  

• If you absorb part of the levy, highlight it as an inclusive rate to drive bookings.

4. How Travelnest’s Smart Pricing and listing services help you absorb costs and stay competitive

At Travelnest, we offer tools and expert support tailored for this evolving cost environment:

• Smart Pricing engine: Our system incorporates your cost base (including any anticipated visitor levy) and market data, enabling nightly rates that reflect your true margin, even when new costs arise.
  
  

• Dynamic rate adjustments: If a council introduces a new levy or you revise your pass‑through strategy, our platform updates your rates across all channels quickly.
  
  

• Multi‑channel distribution: We ensure your listing is visible to both leisure and business guests, maximising your occupancy potential so you spread fixed costs (like levies) across more nights.
  
  

• Listing optimisation and communication support: We help craft your listing copy and guest messaging so that any levies or fees are clearly explained, maintaining trust and reducing cancellations or complaints.
  
  

• Insights & regional benchmarking: Our property experts monitor changes in legislation, competitor rates and guest behaviour, so you are prepared for levy announcements and can adjust before others.
  
  

By combining cost‑awareness with dynamic pricing and occupancy focus, you can maintain margin even as local taxation evolves.

5. Location‑watch: hotspots likely to face new levies and what that means for hosts

Here are some regions and cities where visitor taxes are more likely and how hosts should prepare:

• Manchester & Salford: Already has the £1 per night charge inside the Accommodation Business Improvement Districts (ABID). Hosts in this zone should treat that as part of cost base.
  
  

• Edinburgh (Scotland): A full‑scale visitor levy of ~5% per night is planned for July 2026, affecting hotels, short‑lets and self‑catered accommodation. Hosts should plan ahead to adjust rates or marketing.
  
  

• Wales (nationwide): The law enables local councils to impose a £1.30 per‑person per‑night charge from 2027. Hosts and investors should factor this into new letting decisions
  
  

• Other English tourist‑heavy councils: Even in areas without a formal “tourist tax”, BIDs and local levies are active (e.g., Liverpool). Assess your local council’s policies and any rateable‑value based charges.
  
  

If your property is in a region that may face a levy, pricing early and clearly is better than reacting after bookings drop.

Final thoughts: Adapting now to protect your holiday‑let business

Visitor taxes are not yet universal in the UK, but the trend is clear. As local authorities and councils seek new ways to support tourism infrastructure, rental hosts must factor those costs into their business model. Ignoring the risk may erode your margin, reduce your occupancy, or force sudden rate hikes that deter guests.

With Travelnest’s Smart Pricing, multi‑channel distribution and listing optimisation, you’re well‑placed to absorb levy costs, maintain competitiveness and keep your holiday‑let business profitable in a changing market.

Get in touch with our team or log in to your Travelnest dashboard to review your pricing model and ensure you’re ready for levy changes.