Manchester introduces tourist tax in UK first as Wales plans extra overnight charge for visitors

Visitors staying overnight in Manchester will have to pay a “tourist tax” from this weekend in a UK first.

As of 1 April, anyone who stays in a city centre hotel or holiday apartment must pay £1 per night, per room, as part of a new scheme.

The City Visitor Charge aims to raise £3 million per year and comes ahead of significant expansion of the hotel and holiday let sector in the city. It is expected that almost 6,000 hotel rooms will be added to Manchester in the coming years, which will result in an extra one million overnight stays.

The city is the first in the UK to introduce such a fee, which mirrors similar charges introduced in major European tourist destinations including Venice, Madrid, Barcelona and Rome.

It comes after a referendum was held among hoteliers last year on whether or not to implement the fee, with four in five voting in favour. It means that from April, every “hotel and short stay serviced apartments” in Manchester city centre with a rateable value of £75,00 or more will charge the £1 fee per night fee.

Money raised from the tax will be used to help fund the new Manchester Accommodation Business Improvement District (ABID), which is designed to “improve the visitor experience” and “support future growth of the visitor economy” over the next five years.

While Manchester is the first UK city to introduce such a fee, it won’t be the last as the Welsh government has today announced it will go ahead with plans to charge a visitor levy for tourists who stay overnight.

Tourists will pay a small fee if they are staying overnight in hotels, Airbnbs or bed and breakfasts, similar to charges already in place in more than 40 destinations such as Greece, France, Amsterdam and the US state of California.

A survey published by the government on Thursday (30 March) found that two thirds of Welsh residents living in holiday areas back the tourism tax, although members of the tourism industry warned it is the wrong time to impose it as it may deter visitors who are already cutting back on holidays due to higher bills.

More than 1,000 people, including tourist businesses, responded to a public consultation about how the levy should be brought in, with only 13% saying tourists should not contribute towards the cost of maintaining areas they stay in.

How much visitors could be charged has not yet been decided, but finance minister Rebecca Evans previously said it would be a “small contribution” that would go towards maintaining local amenities such as beaches, pavements, parks, toilets and footpaths. She is expected to confirm plans for the levy on Thursday and legislation will be put to the Senedd within this government term.

Ms Evans said: “As the Easter break approaches and many parts of Wales prepare to welcome visitors from around the world, it’s more important than ever that we look to create a sustainable tourism sector that also supports local communities.

“Over the coming years, we will continue to work with businesses, local government and all our partners to design a levy that will put power into the hands of local communities. We understand some businesses have reservations about a visitor levy and I am grateful to all those who took the time to respond to our consultation.”

Proposals for a visitor levy have been progressed through the Welsh Government’s co-operation agreement with Plaid Cymru. Plaid Cymru designated member Cefin Campbell said: “We want Wales to have a thriving, sustainable tourism sector and the visitor levy will play a part in achieving this.

“Our aim is to develop responsible tourism that works both for visitors and for the communities they are visiting. Local authorities will be able to introduce a small contribution from visitors enjoying their area to help develop and protect local services and infrastructure.”

Elsewhere in the UK, Edinburgh will soon introduce a tourist tax after local officials voted through plans for it last year. The City of Edinburgh Council approved the plans on 1 November 2022, which will see each person taxed £2 for every night they stay in the capital, up to seven nights

Oxford, Bath and Hull have also considered a similar move in recent years, but opted against it.