Burnley hotel leader warns of challenges from proposed tourist tax
It's thought the Government plan could increase financial pressures for hospitality industry.
A Burnley hotel owner has raised concerns over the potential impact of a proposed Tourist Levy announced by the Government. Chairman of Starboard Hotels Ltd - who own the Holiday Inn Express in Burnley - Paul Callingham, says the measure could put additional pressure on hotels already facing significant challenges.
The Tourist Levy, which would allow mayors to impose a nightly charge on guests staying in their area, was revealed as part of the Chancellor Rachel Reeves’ Autumn Budget speech. However, according to Callingham, this new policy is flawed and could harm the hospitality sector rather than help.
“There was nothing in the budget that would seriously adversely affect hospitality, but the Tourist Levy is disastrous,” Callingham said.
Callingham expressed that this levy would serve as a direct tax on hotels, highlighting that the funds raised wouldn’t likely be seen as an added cost by guests, as room rates are market-driven. Instead, hotels will have to absorb the fee, adding to existing financial burdens.
With increasing operating costs this year—including rises in National Insurance and the minimum wage—Callingham noted that many businesses across the hospitality industry have already struggled financially.
"The National Insurance increase earlier this year and the minimum wage changes came at the same time, putting a huge strain on businesses,” Callingham explained. “We’re seeing restaurants, pubs, and hotels close down because of these pressures.”
Callingham criticised the lack of clarity on how the levy would be applied and used, suggesting that different rates across the UK would complicate operations for businesses like his own.
He also raised doubts about how the levy could be collected from private holiday accommodation providers, such as Airbnb landlords.
Regarding private platforms, Callingham said, “There is already an unfair structure with unlicensed Airbnb operators who don’t contribute to the economy in the same way that hotels do. How the levy will apply to these providers is unclear.”
Callingham called on mayors to consult with hoteliers before implementing the levy, encouraging them to use the funds to benefit tourism rather than merely supporting local authority budgets.
“If the money goes towards bringing visitors into the area, that’s one thing,” Callingham said. “But if it’s just to prop up budgets, then that’s unfair.”
With Burnley's hospitality sector largely sustained by corporate travel, Callingham also flagged potential knock-on costs for businesses due to the proposed levy.
Believing more discussion and clarity are needed, Callingham emphasized that while hospitality businesses value their regions, measures like this must be carefully thought through to prevent further strain on the industry.