Overnight Visitor Levy Moves Closer Despite Coastal Business Fears

Holiday accommodation across York and North Yorkshire could face a five percent price hike as the government introduces a new visitor levy bill to Parliament.

Holiday accommodation across York and North Yorkshire could face a five percent price hike under new government devolution reforms.

The Visitor Levy Bill has been introduced into Parliament, bringing local leaders a step closer to implementing a charge on overnight stays.

The proposed legislation will give regional mayors the power to raise funds for local infrastructure improvements, aligning England with destinations such as Edinburgh, Manchester, Paris, and Barcelona.

York and North Yorkshire Mayor David Skaith intends to introduce the charge and is among ten regional mayors who have committed to keeping any levy capped at five percent or below.

Mr Skaith said:

"The overnight visitor levy is one step closer after being introduced into Parliament. The government wants to give mayors like me the opportunity to introduce a levy on hotels, B&Bs, guest houses, and all of the accommodation types across our areas.

Here, in York and North Yorkshire, that additional funding could go into supporting things like transport, economic regen, high street rejuvenation, skills, and promoting the region.

There's still a long road ahead, but I'll be listening to residents and businesses alike before we also do a full public consultation.

This levy is really about giving more local areas more tools and more money to invest in their places."

Despite the promise of extra funding for transport and public spaces, tourism leaders across Scarborough and Whitby have warned the extra cost could devastate trade during an ongoing cost-of-living crisis.

Accommodation providers have expressed severe concerns that the region's price-sensitive domestic market cannot absorb the additional fees, especially when compared to cities that attract international tourists.

These concerns were raised during a recent roundtable event in Whitby, convened by Scarborough and Whitby MP Alison Hume, to gather the views of local businesses.

Ms Hume noted that the Yorkshire coast operates as a very different market to York, which attracts substantial numbers of overseas visitors who are already accustomed to paying visitor levies in destinations across Europe.

Ms Hume said:

"Tourism is the lifeblood of Scarborough, Whitby and the surrounding villages, so it was important to bring together businesses and stakeholders from across the sector to hear their views directly.

"It was a constructive, informative and extremely worthwhile discussion where people spoke openly and frankly.

"Every area of accommodation was represented - from hotels to hostels to holiday parks and short term lets. The overwhelming view was that introducing a levy on stays in our coastal communities during a cost of living crisis and at time when businesses are under pressure from changing visitor behaviours, high utility bills, staff costs and VAT at twenty per cent, this levy could potentially be the straw that breaks the camel's back. Understandably, the sector is extremely worried and nervous.

"I do believe we need more detail before any decisions are taken.

"Businesses want real and quantifiable answers on how a levy would work in practice and what it might mean for their visitor numbers and trade."

Initially, a report commissioned by Mr Skaith recommended a flat one-pound-per-night charge across the region.

However, this approach has now been superseded by the government's announcement that the levy will be percentage-based, meaning cheaper stays will incur smaller charges to protect lower-cost accommodation.

Ms Hume has previously made it clear she remains unconvinced about how the levy would function in price-sensitive coastal markets, given their popularity among domestic tourists and families.

During the meeting, stakeholders raised practical questions, including whether exemptions would apply and what would happen when North Yorkshire residents take holidays on the Yorkshire coast or elsewhere within their own county.

The MP also used the Whitby meeting to call for Scarborough and Whitby to benefit directly from any monies raised within their boundaries.

Ms Hume added:

"I'll continue working with tourism businesses, hospitality leaders and Mayor David Skaith to press for detailed economic impact assessments to prove that the benefits of a levy will outweigh the costs of administering it and also ensure our communities have a very loud voice in this conversation."

The new bill sets out details on how the levy will work, including who will be protected, how decisions will be made locally, and how the rules will be enforced.

Areas wanting to introduce a visitor levy will first need to set out plans including proposed rates, thresholds, exemptions, and how money will be spent alongside an impact assessment.

National exemptions are built in for student accommodation, care homes, shelters, and long-term stays over 28 days, but the Mayor and York and North Yorkshire Combined Authority will have the ability to add other exemptions.

Secretary of State for Housing, Communities, and Local Government Angela Rayner said:

"Millions of people visit our wonderful towns and cities each year, and it’s right that our communities should be able to feel the benefit of that footfall.

"Every pound raised through these levies will stay in the local area. Whether that’s better transport, thriving high streets, or more attractions that keep visitors coming back.

"This is about giving mayors and local leaders the choice to invest back into what matters most to local people, while protecting lower-cost stays and making sure businesses have their say."

The Mayor has committed to working closely with residents and businesses to ensure any levy benefits people who live, work, and visit York and North Yorkshire.

Mr Skaith added:

"We’re home to historic towns and cities, two of the UK’s best National Parks and a coastline brimming with character.

"There’s something for everyone, and we welcome more than 40 million visitors every year. That’s why an Overnight Visitor Levy will be a total gamechanger for our county.

"Investing in York and North Yorkshire’s cities, towns and villages to make them a better place to visit, and to live in, is at the heart of why I will be introducing a Levy in our county."