"UK Travel Costs to Rise by 200,000 Won"… London Moves to Introduce Tourist Tax Worth Up to 635 Billion Won

London Mayor Mentions "Around 5% of Room Rates"

Revenue to Be Reinvested in Transportation, Public Facilities, Cultural Infrastructure

Plan for Costs to Rise by 180,000–220,000 Won Starting March 2028

Travelers visiting major tourist destinations in England, including London, will soon have to pay an additional "tourist tax" on top of hotel accommodation fees. This comes as the UK government plans to grant local governments the authority to impose their own levies on overnight guests.

Big Ben, London. Adobe Stock Image

According to the BBC on September 12 (local time), the UK government is moving forward with a plan to allow local authorities in key regions of England, such as London, Liverpool, Greater Manchester, West of England, and York & North Yorkshire, to introduce their own "Overnight Visitor Levy." Under this plan, tourists would pay an extra percentage fee on top of their room rate when staying at lodging facilities.

Autonomous Taxation Without a Cap ... London Says "We Will Not Exceed 5%"

The most notable point is that the central government has not set an upper limit for the tourist tax rate. Each region will be allowed to determine the rate autonomously, taking into account their local accommodation prices and the size of their tourism industries.

However, major local leaders—including London Mayor Sadiq Khan—support treating 5% of the room rate as the de facto cap in London, in contrast to global cities like New York (14%) or Amsterdam (12.5%). They view this as a practical level that prevents excessive regional disparity while still providing a meaningful revenue stream.

Tourists filling the streets of London. Travel Tomorrow

The move to introduce the tourist tax aims to secure city management funds to cope with the surge in visitors. According to analysis by Central London Forward, if London implements a 3% tourist tax, it could generate over 350 million pounds (about 635.03 billion won) in annual tax revenue.

The funds collected in this manner would be channeled into improving transportation, public facilities, street environments, and cultural infrastructure. With Edinburgh in Scotland already introducing its own 5% tourist tax on accommodation in July this year, local governments in England will now also be empowered to impose their own levies.

Family Travel Costs May Rise by Around 180,000–220,000 Won

Meanwhile, the tourism and hospitality industries are mounting strong opposition. They argue that, given already high prices and accommodation costs in the UK, any additional tax would increase the perceived burden on travelers and could dampen overall tourism demand.

British currency. Getty Images

Alan Simpson, CEO of UKHospitality, warned, "If the tourist tax is rolled out across England, the average family holiday will cost an extra 100–120 pounds (180,000–220,000 won)," adding that "33,000 jobs in the tourism and food service sectors could be at risk." The Westminster City Council also insists that more than half of the revenue from the tourist tax should be allocated to frontline district budgets for street cleanliness and public safety.

In response, local authorities argue that it is not feasible to cover the skyrocketing urban management costs caused by surging tourist numbers solely through local residents' taxes. They explain that collecting a reasonable fee from visitors and reinvesting it in infrastructure will create a positive cycle, boosting the city's long-term tourism competitiveness.

The UK, which has long suffered from overtourism—attracting over 20 million visitors annually and experiencing road congestion—was, until now, the only G7 nation where local governments were prohibited from imposing a tourist tax. With this regulation now lifted, the London city government and the national government plan to hold close consultations with industry stakeholders and local councils until March 2028 to establish detailed collection and execution schemes.

This content was produced with the assistance of AI translation services.