London is considering a tourist tax. Here’s what it could mean for visitors

Barcelona, Berlin, Paris, Prague and Venice. Soon, London could be added to the growing list of European cities charging a tax on tourists.

Speaking at one of London’s 10 annual Mayor’s Question Time assemblies this week, city mayor Sadiq Khan expressed support for a levy on visitors to the UK capital. Tourists “don’t really mind paying the extra few euros” to holiday elsewhere, he explained.

But while some cities across Europe have successfully implemented tourist taxes, their impact hasn’t always been straightforward. Some argue they are essential for maintaining tourism infrastructure, but others worry they could deter visitors in the long term.

Could a London tourist tax strike the right balance?

How much do tourist taxes generate – and where does the money go?

Across Europe, tourist taxes have become a popular source of fundraising for cities struggling to manage overtourism and pay for public services.

InBarcelona, for example, visitors currently pay up to €4 per night, on top of a regional tax. These hefty fees generate lots of money for the city – up to €100 million annually – which goes to maintaining infrastructure, improving public transport and preserving historic sites.

Paris charges visitors up to almost €16 a night to stay in its most expensive hotels, generating millions of euros each year to support cultural projects and urban upgrades.

If London follows suit, a levy could raise significant sums. Official estimates suggest a 5 per cent tax on overnight stays could generate nearly £240 million (€285 million) annually.

While no formal plans have been outlined, Khan has said that money would support the tourism and hospitality sectors.

“My promise to the hotels and AirBnbs and so forth is the money would be used to improve the environment around that, to encourage more tourists,” he said.

Could a London tourist tax hurt its hospitality sector?

As the fees continue to rise, critics have questioned their impact.

The Barcelona Hotel Association told local media in February that the ever-growing tax – in 2025, a stay in afive-star hotel could cost an extra €15 per night, plus VAT – amounted to the ‘fiscal asphyxiation’ of one of the city’s most important sectors.

Venice this year is set to double its tax on day-trippers and short-term visitors from €5 to €10. While the tax netted the city €2.2 million in 2024, officials noted it did little to dissuade the kind of tourism that has clogged the city’s public spaces and squeezed out locals.

Earlier this year, businesses acrossWales closed their doors on St David’s Day to protest a proposed tax. Opponents argued that it would make Wales less competitive at a time when tourism-dependent businesses were still recovering from pandemic losses.

In London, where hotel prices are already among the highest in Europe, the introduction of an additional charge could be a sticking point. With tourism hovering just above pre-pandemic levels – VisitBritain estimated 41.2 million inbound visits in 2024, up only 1 per cent from 2019 – some fear a tax could discourage budget-conscious travellers.

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Tourism trade group UKHospitality told UK newspaper The Standard that additional taxes would be ‘extremely damaging.’ 

Will London join the ranks of tax-charging cities?

Last year in Europe was marked by a procession of anti-tourism protests. FromAmsterdam to the Canary Islands to Greece, locals took to the streets to voice frustrations over the ceaseless increase in visitors and the impact the industry has had on housing, healthcare and other public services.

Tourism taxes have yet to stem the tide of visitors, but they have generated millions for cities struggling to keep a lid on them. With major European destinations already cashing in on these taxes, London’s own levy may feel inevitable.

But whether it succeeds might depend on how it is framed – either as a necessary tool to support local infrastructure or as an unwelcome extra cost for travellers.

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As the debate unfolds, one thing seems certain: the conversation around London’s tourism economy centres on more than an ‘extra few euros.’