Tourist tax plans

A new ‘tourist tax’ charged on visitors to the North East could be set at £2 per night, writes Local Democracy Reporter, Daniel Holland.

The Government announced in November that North East mayor Kim McGuinness would be among the local leaders being handed the power to introduce a new levy on overnight stays.

Such a charge would apply to tourists booking hotels, holiday lets, bed and breakfasts, and guesthouses across the region.

Ms McGuinness had previously advocated for an additional £1 a night charge on visitors’ bills in her 2024 election manifesto, in order to raise funds to invest back into improving the North East’s cultural attractions.

However, she has now told the Local Democracy Reporting Service that her office is currently drawing up plans based on a £2 a night tourist tax – which the Labour mayor says would generate around £20 million per year.

That levy would match the flat £2 nightly charge on hotel stays in Liverpool. Edinburgh has taken a different approach, with the Scottish capital preparing for the launch of a 5% visitor levy in summer 2026.

Ms McGuinness said: “I think it is important to say we are still working through that. But the sums we are doing, and looking at the hope to raise at least £20 million a year based on current visitor numbers, would be based on £2 a night. 

“That is much lower than you see in most places across Europe. It matches what you are seeing in local areas such as Liverpool at the moment. That would secure us, on current visitor numbers which we want to increase, around £20 million a year to spend directly on increasing those visitor numbers – on bringing more tourists from outside the area, on hosting more major events, and on making sure that we are talking about how wonderful this place is. [We are] taking what I think is the best place in the world global and saying ‘come and visit us and spend your money in our economy because you will not regret a minute of it’.”

A city visitor charge in Manchester, set at £1 per night, raised £2.8 million in its first year after launching in 2023.

The Government is currently running a consultation on its proposals to give England’s mayors the power to levy a tourist tax, running until February 18.

Local leaders are hoping to double the number of tourists coming to the North East over the next decade, with our region attracting the lowest number of international visitors in England. 

According to Visit Britain, the number of overseas tourists coming to the North East in 2024 fell 6% to just 429,000 compared to the previous year.

By contrast, the North West attracted 3.4 million and Yorkshire and the Humber 1.1 million.

Northumberland County Council leader Glen Sanderson warned recently that a tourist tax risked becoming “another burden” for struggling hospitality businesses, while Tory Tees Valley mayor Ben Houchen has vowed not to impose such a levy in his area.

However, Ms McGuinness says that the charge will be critical to bolstering the North East’s reputation.

She said: “I cannot stress enough that every single penny of it will be spent on boosting the tourist economy and culture  in our region, bringing in those major events that have a difference to everyone right across our region from rural areas to our towns and cities. This is not about propping up other services, this is 100% about having a positive impact on that industry and on attracting people to visit this great place.

“I can make a guarantee that every penny of it will be spent in the region and on that drive for better events, more visitors, and improving that economy.”