A well-known UK hotelier, Sir Rocco Forte, has strongly spoken out against a proposed “hotel tax” that the government is considering introducing.
He highlighted how important the travel and tourism industry is to the UK’s economy, saying it contributes over £250 billion a year to the country’s GDP and supports 3.5 million jobs. He warned that the tax could harm the industry, especially as the UK is already considered an expensive destination for tourists.
Chancellor Rachel Reeves is reportedly planning this new tax as a way to bring in more money for the government and help balance public finances. The idea is based on France’s tourist tax system, where visitors pay a small charge depending on their accommodation type.
For example, in France, campsites charge less than £1 per person per night, while luxury five-star hotels charge over £12 per person per night. If introduced in the UK, this tax could potentially raise over £1 billion each year.
The timing of this proposal has raised questions, as Reeves had previously promised not to introduce any new taxes. Her earlier commitment was to avoid adding to the £40 billion in tax rises that were already announced in the autumn Budget.
However, the government is facing increasing financial pressure. Borrowing costs for the UK have gone up significantly, reaching their highest levels since 2008. At the same time, the value of the pound has fallen below $1.22, creating more urgency for the government to find new ways to bring in money.
If borrowing costs stay high, the Chancellor may have no choice but to take more drastic steps, such as increasing other taxes or cutting spending. Treasury officials are also exploring other options, like raising corporation taxes or cutting disability benefits, though these measures are likely to spark public and political backlash.
Some areas of the UK have already moved forward with similar taxes. Edinburgh plans to introduce a 5% accommodation tax in July 2026, aiming to raise £50 million per year to fund city improvements. Wales is also looking to introduce a visitor levy, where tourists would pay £1.25 per night. If this scheme were applied across England, it could raise around £560 million every year. Even Venice in Italy has implemented a similar system, charging tourists between €1 and €5 per night.
Sir Rocco Forte believes that introducing such a tax in the UK would discourage many cost-conscious travelers, who might choose cheaper destinations instead.
He said the impact would go beyond hotels, affecting restaurants, shops, taxi drivers, and other parts of the tourism economy that depend on visitors. He described the tax as “pernicious,” meaning harmful, and unnecessary given the challenges the industry is already facing.
The Treasury has not confirmed if the hotel tax will definitely go ahead. A spokesperson said they won’t comment on tax changes outside of formal announcements but acknowledged that meeting fiscal rules is a priority. The Chancellor has requested an official report to be delivered by March 26 to assess whether the government is meeting its financial targets.
While tough decisions are being made, the government insists its focus is on boosting economic growth and ensuring that more money goes into the pockets of working people. Still, the potential hotel tax is raising concerns among business leaders and tourists alike, as it could significantly change how affordable and appealing the UK is as a destination.
