Tourist tax could raise 350m a year for London

"A tourist tax on overnight visitors to London could raise more than 350m a year for the capital, according to new analysis. This is significantly higher than previous forecasts, which suggested such a levy could raise up to 240m annually. The latest figure from Central London Forward (CLF), which represents 12 central London local authorities, is based on a 3% levy on the cost of a room, whether a hotel or short-term let."

"This has sparked calls from the central boroughs to retain half of the additional income in order to mitigate the increased cost pressures of tourism. Westminster could raise more than 95m by itself, according to visitor estimates, with Camden, Kensington and Chelsea, and Tower Hamlets all forecast to bring in more than 20m annually. It has not yet been decided how any money raised from a tourist tax in London would be split between City Hall and local authorities."

"There are currently 196 hotels across in London either in planning, under construction or undergoing renovation. Together, these have the potential to deliver another 29,500 hotel rooms, according to the LDRS. This is in addition to an average 2% increase in AirBnB listings in the capital every year, which suggests another 1,249 short-term lets going on the market in the next five years."

Central London Forward estimates a 3% levy on the cost of overnight stays could raise more than £350 million a year for London. CLF represents 12 central London local authorities. Mayor of London Sir Sadiq Khan received powers last year to levy an overnight-stay tax. Central boroughs want at least half of any additional revenue to stay locally to address tourism cost pressures. Westminster could raise over £95 million, while Camden, Kensington and Chelsea, and Tower Hamlets each could exceed £20 million. The distribution between City Hall and boroughs remains undecided. London currently has 196 hotels in planning or renovation, potentially adding 29,500 rooms, alongside steady AirBnB growth.

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