Plans to give local leaders powers to introduce a tourist tax on overnight stays have raised concerns across the hospitality industry, with operators warning that additional costs for visitors could have consequences beyond the hotel sector.

The Telegraph reported concerns from the hospitality industry around the proposed levy as businesses are already managing rising employment, business rates and other operating costs. Michelin-starred chef Simon Rogan, whose group holds nine Michelin stars including three-starred L’Enclume in Cartmel, warned that the tourist tax could force him to shelve plans for more UK restaurants. He said: “The margins in our restaurants are very, very tight… Of course, we’d love to expand in the UK but it’s not a viable proposition at the moment.” He added that the levy comes on top of rising National Insurance contributions, minimum wage increases and energy bills: “When you think you can’t get any worse, here comes along the tourist tax.”

Rogan said his group is now looking to invest abroad, while expanding its takeaway offer and providing catering at sporting events to diversify income.

Why does this matter beyond hotels?

While accommodation businesses would be most directly affected, there could be wider implications for hospitality operators in tourist destinations.

If an additional charge increases the overall cost of a trip, visitors may become more conscious of their spending elsewhere, potentially affecting restaurants, pubs, bars and attractions. For businesses considering expansion into tourism-heavy locations, additional visitor charges could also become another factor when assessing future demand and investment. Rogan’s comments show how this can already be influencing expansion decisions, even for businesses with accommodation as only one part of their offer.

For operators, it reinforces the importance of:

• Understanding local developments, as the introduction and structure of a levy could vary by area.
• Protecting value for customers as the overall cost of visiting a destination increases.
• Reviewing margins and purchasing costs to find efficiencies without automatically passing increases onto customers.
• Monitoring consumer behaviour to understand whether guests begin changing how and where they spend.

With hospitality continuing to face pressure across wages, tax and other costs, the debate around tourist taxes highlights the importance of operators maintaining a clear view of costs and protecting value for customers.