A new charge known as the "Overnight Visitor Levy" will be imposed on anyone spending the night in hotels, guest houses, or Airbnb accommodations under the plans introduced by Labour-controlled city mayors. The levy, effectively a five percent surcharge on accommodation costs, is set to affect a broad range of visitors, including business travelers and those visiting sick relatives.

Data from the Great Britain Tourism Survey highlights that in 2024, business travelers accounted for 16 million overnight stays, while people visiting friends and family contributed to another 110 million of the total 307 million overnight stays. The levy’s wide scope has sparked concerns from various sectors about its impact beyond traditional holidaymakers.

Allen Simpson, chief executive of UKHospitality, warned that the tax would increase costs across the board, potentially harming workers who must stay in paid accommodation out of necessity. “A self-employed builder may have no choice but to stay in a hotel when they’re working away, and now that stay will become significantly more expensive,” Simpson said. He also highlighted the risk to 33,000 jobs in the hospitality sector and called on the government to reconsider and scrap the proposals.

Opposition lawmakers have criticized the levy as unfair, particularly for non-tourist groups affected by the surcharge. Tory culture spokesman Rebecca Paul pointed out that individuals staying overnight for reasons such as medical visits or to see ill relatives will be disproportionately burdened. “It is not fair to tax people simply for going about their daily lives,” she said, further warning that the tax could threaten jobs within the hospitality industry and impose additional costs on working families.

Labour MPs have also raised objections, urging the government to consider exemptions for vulnerable groups including young people attending camps and those taking respite holidays for disabled relatives. Jonathan Davies, MP for Mid Derbyshire, cited the Drum Hill Scout Camp, which draws young people from various regions, as an example where exemptions should be considered. Emma Lewell, Labour MP for South Shields, stressed that local hospitality businesses—such as family-run bed and breakfasts, caravan parks, and hotels—stand firmly against the levy, describing it as the “wrong tax at the worst time” that could push local enterprises into decline.

In a controversial twist, it emerged that MPs would be able to claim back the additional costs incurred by the levy when staying overnight on parliamentary business expenses. A spokesman for the Independent Parliamentary Standards Authority (IPSA), which oversees MPs’ expense claims, confirmed that reimbursements would include taxes and levies within a capped total amount. For example, MPs representing constituencies outside London can claim up to £230 per night for hotel stays in the capital, covering the levy cost.

As the Overnight Visitor Levy prepares for rollout, debate continues over its fairness and potential economic implications, with critics calling for greater exemptions and reconsideration of the policy’s scope.