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England's Holiday Tax Sparks Industry Outcry

  //travel-leisure.news-articles.net/content/2026/ .. ngland-s-holiday-tax-sparks-industry-outcry.html
  Published in Travel and Leisure on Wednesday, February 11th 2026 at 20:13 GMT by The Irish News
      Locales: England, UNITED KINGDOM

London, England - February 12th, 2026 - A proposed new tax on holiday accommodation in England is facing fierce opposition from industry leaders who fear it will send the cost of domestic holidays soaring and severely damage the UK's tourism sector, still recovering from the impacts of the COVID-19 pandemic. The tax, currently under consideration by the government and the Treasury, aims to generate funds for much-needed improvements to tourist infrastructure across England.

However, the proposed levy is being met with widespread concern. Industry figures argue that the timing couldn't be worse, with businesses already battling rising operational costs and the lingering effects of the pandemic. They predict the tax would be passed directly to consumers, creating a significant financial burden for families and individuals seeking a domestic getaway.

Kurt Janson, policy director at the Tourism Alliance, described the proposed tax as a "hugely damaging move." He emphasized the critical role domestic tourism has played in sustaining the industry since the pandemic began. "We've seen a real boom in people choosing to holiday within the UK, supporting local economies and businesses. This tax directly undermines that positive trend," Janson stated. "It's incredibly short-sighted." He further highlighted the competitive disadvantage such a levy would create, making England a less attractive destination compared to European counterparts who do not impose similar taxes. A recent analysis by the Tourism Alliance suggests that countries like France, Spain and Italy benefit from a lower overall cost for tourists, largely due to the absence of dedicated accommodation taxes.

Tony Danker, director general of the Confederation of British Industry (CBI), echoed these concerns. "The hospitality sector is incredibly vulnerable right now," he said. "Rising energy prices, supply chain disruptions, and staffing shortages are already putting immense pressure on businesses. Adding a new tax on top of all of that would be a devastating blow. It's likely to deter both domestic and international visitors, leading to job losses and business closures." Danker also points to the potential for a ripple effect, impacting related industries such as transportation, entertainment, and retail.

The plans stem from a government consultation on funding options for tourism infrastructure improvements. While acknowledging the need for investment in areas like transport links, signage, and visitor centres, critics argue a blanket tax on accommodation is a blunt instrument and unfairly targets a single sector. The Tourism Alliance is actively lobbying for the government to explore alternative funding solutions, such as redirecting existing funds, public-private partnerships, or exploring innovative financing models.

Several regions within England are particularly vulnerable to the impact of the tax. Coastal areas, traditionally reliant on domestic tourism, could see a significant drop in visitor numbers. Similarly, rural communities and national parks, which depend on revenue from accommodation and related services, are bracing for potential economic hardship. There are fears that the tax could exacerbate existing regional inequalities, widening the gap between thriving tourist hotspots and areas struggling to attract visitors.

The potential for 'leakage' is also a concern. Analysts suggest that a significantly higher cost of holidays in England could drive tourists to seek alternatives abroad, benefiting other European economies while simultaneously harming the UK's tourism industry. The Tourism Alliance has commissioned an independent economic impact assessment to quantify the potential losses, which they claim could run into billions of pounds annually. They plan to present these findings to the Treasury in the coming weeks.

The debate over the holiday tax underscores the delicate balance between generating revenue for public services and fostering a thriving tourism sector. Industry leaders are urging the government to prioritize a collaborative approach, working with stakeholders to identify sustainable funding solutions that support, rather than stifle, the industry's recovery and long-term growth.