Visitor Levies: Getting the Design Right — Tourism Alliance Policy Position

Tourism contributes £147 billion a year to the UK economy — 5% of GDP and £52 billion in tax revenue — yet the Tourism Alliance does not support Overnight Visitor Levies (OVLs). Its July 2026 position paper argues that if such levies do go ahead, their design will determine whether they strengthen or damage local visitor economies.

The paper makes four core points. First, accommodation providers — mostly micro-businesses — are already under significant cost and regulatory pressure, from the UK’s full 20% VAT rate (well above the reduced rates common across Europe) to rising employment costs, business rates, and compliance burdens. Second, no national, sector-specific assessment of OVL impacts has been carried out, leaving evidence gaps around effects on price-sensitive rural and coastal destinations and lower-income travellers. Third, the paper identifies five categories of risk: economic (stacking a levy on already-high VAT), displacement (citing cancelled Scottish Ballet performances and the Edinburgh TV Festival’s relocation to Manchester), operational (pointing to Germany’s fragmented local schemes), governance, and reputational.

Finally, the paper sets out ten headline recommendations for getting levy design right, including conducting impact assessments first, adopting one consistent national framework, ring-fencing revenue for the visitor economy, guaranteeing that levies add to rather than replace existing budgets, fixing the VAT threshold interaction, and building in regular review and the ability to reverse a levy that isn’t working.

Read the full paper for details – Getting It Right_Overnight Visitor Levy