Prime Minister Andy Burnham has described an overnight visitor levy as a possible "major game-changer" for Cornwall, but hoteliers in the region remain deeply sceptical.
Their concerns centre on the impact such a charge could have on competitiveness in a rural area that already faces seasonal fluctuations. There are also doubts over whether the money raised would be ring-fenced to support tourism.
In a cabinet statement published at the end of July, the government said it plans to give "all strategic authorities the ability to introduce an overnight visitor levy", with local leaders able to set out plans for how those revenues will be invested.
Speaking during a visit to Cornwall, Burnham said implementing the charge could be "a major gamechanger" for the county, if "pitched the right way".
Several UK cities, including Manchester and Edinburgh, have already brought in overnight levies using devolved powers and varied models. Cornwall Council has made clear its interest in introducing an overnight levy, though details of how it would work have not yet been revealed.
Regardless of the model, hoteliers are mostly worried about the impact on competitiveness. The Tourism Alliance has pointed to evidence that price-sensitive rural and coastal destinations are more exposed than high-demand city markets. It also said a flat charge takes its largest share from low-cost stays, hitting lower-income families and off-season breaks the hardest.
Alistair Handyside, chair of the South West Tourism Alliance, said data shows the south west has already seen its summer holiday market share slide rapidly since 2015.
Veryan Palmer, hotel director at the Headland in Newquay, is among those who believe a visitor charge does not suit a destination like Cornwall. She said: "Cornwall is a rural region, not a major city. We have a very seasonal economy and in winter rates drop and the majority of businesses trade at a loss. It seems absurd to consider adding an additional charge. If businesses thought they could charge an extra 5%, they would already be doing so."
Palmer argued that with Cornwall competing against European destinations for summer trade, a levy would put the region at a disadvantage, particularly because rates and taxes must be absorbed into advertised prices in the UK. This would be made worse by the lower VAT rates charged on the continent.
She added that different locations within the UK could end up competing for visitors if local authorities are free to set their own levies, while also hurting the local tourism that operators depend on during the winter months by pushing rates out of reach for some consumers.
Mike Warren, chief executive of Harbour Hotels, which runs three hotels in Cornwall, is opposed to any visitor tax and said it would affect competition. He said: "[We] disagree entirely with the proponents of it, who frequently refer to European countries and cities who do have a form of visitor tax."
Warren argued that the comparison is irrelevant because "the level of VAT, excise duty and government-imposed employment costs in Europe are significantly less than in the UK".
He added that Burnham should instead focus on improving the trading environment for hospitality: "The prime minister should take his opportunity now to positively impact the trading environment the UK hospitality industry is operating in and address as a priority the complex and inequitable business rates, and the threat of additional employment regulation and bureaucracy that we face.
"He should focus on these larger issues. Doing so will encourage more employment in the industry, particularly of younger people."
Kate Nicholls, chair of UKHospitality, has echoed the concerns of operators and in February called for the government to rethink. She said: "A tourist tax will make England less competitive internationally and hit the very visitors the government says it wants to attract. While we urge government to rethink this policy entirely, if it does go ahead, it must be designed in the least damaging way, with national consistency, a simple flat-fee model and receipts used for the benefit of hospitality and tourism, alongside genuine involvement from the businesses expected to deliver it."
Manchester and Edinburgh have both introduced visitor charges, but under very different models.
In Manchester, the charge is £1 per room, per night, and was implemented by the Accommodation Business Improvement District (ABID) rather than the local authority. The funds raised are pooled and go towards hosting major events, marketing campaigns and other initiatives to boost the industry. Events attracted in part by the ABID's efforts include the Brit Awards and the MOBO Awards.
Adrian Ellis was chair of the Manchester Hoteliers' Association between 2016 and 2024, when the charge was introduced. He said: "[The charge] was created to bring concerts, new sporting events and tourism [to the city] and to make the city a more attractive destination for tourism. All the money raised – which is quite substantial – goes into a fund to help the hoteliers in the city. Burnham and his colleagues were supportive, which ultimately meant that we as hoteliers benefited from, and are still benefiting from, the programme."
In Edinburgh, a 5% levy is charged on the original booking cost, limited to five nights. The tax is collected by accommodation providers and passed to the local authority.
Cornwall Hoteliers Oppose Tourist Tax Plans