UAE travellers visiting London may need to pay a new 'tourist tax' soon

Dubai: Dubai: London is moving closer to introducing a tourist levy (often called a 'visitor tax') on people who stay overnight in the city — and UAE travellers should be aware of what this could mean for future trips.

The idea has been gaining momentum after the mayor of London, Sadiq Khan, welcomed plans that would finally allow the city to introduce such a charge. Under the English Devolution and Community Empowerment Bill, which is currently progressing through Parliament, mayors and local authorities in England may soon be given the power to add a small fee to hotel and short-stay bookings.

Why London wants a visitor levy

London has long been one of the world’s most visited cities. In 2024 alone, visitors booked 89 million overnight stays. A small levy on those stays could generate up to £240 million a year, according to estimates cited in official briefings.

The idea is widely used across major global cities. In fact, England is currently the only G7 country where local governments cannot introduce such a tax. Scotland and Wales have recently approved their own versions, with Welsh authorities able to collect £1.30 per night from 2026.

How the system could work

In a briefing released last week, the Greater London Authority (GLA) asked policy think-tank Centre for Cities to review what model would work best for London. Their research found three main approaches used in major cities such as Paris, Milan, Tokyo, New York and Toronto:

• Percentage levy: A fixed percentage added to your nightly accommodation bill (used in New York and Toronto).

• Flat fee: One fixed amount per night, regardless of hotel type (used in Tokyo).

• Variable fee: Based on accommodation type and rating (used across France and Italy).

Because the UK does not have a formal hotel star-rating system like France or Italy, the briefing said London would be better suited to either a percentage-based levy or a flat nightly fee.

The GLA previously estimated that:

• A £1 per night levy could raise £91 million per year

• A 5% levy on overnight stays could raise £240 million

Researchers concluded that such a fee would not significantly reduce visitor numbers because demand for London remains strong.

Cost UAE travellers can factor

For visitors from the UAE, the expected cost is small — likely just a few pounds per night, depending on the model chosen. The impact on a typical long-weekend stay is minor, and the fee would be added transparently at booking or check-in.

More importantly, the money raised would be used to improve the city. According to Centre for Cities, a levy could “boost both economic growth and improve infrastructure and the business environment in London.” That means better transport, smoother tourism services, and more investment into the areas travellers rely on most.

‘London follows proven model’

Andrew Carter, Chief Executive of Centre for Cities, said London should look to Scotland’s model: “The model the government should adopt is already under way in Scotland, where Edinburgh, Glasgow and Aberdeen are introducing levies valued at a percentage rate on overnight stays in hotels, B&Bs and short-let accommodation.”

He added that: “A key benefit of that approach is that it is flexible, and the rate could rise and fall depending on the demand for overnight stays.” Carter also noted that London stands to gain significantly: “A tourist levy would benefit the capital’s tourist economy, provided the revenues go to local government – ideally split between City Hall and the boroughs – and are not ring-fenced by central government for specific purposes.”

What UAE travellers can expect

• London does not have a tourist levy yet.

• The law must pass through Parliament before London can introduce one.

• Any fee would be modest and clearly displayed when booking.

• The funds would be used to improve visitor services and city infrastructure.

• Other major European and global cities already charge similar fees.

Travel tips for UAE visitors

• At booking time, check your accommodation total: Ask if a visitor-levy or “tourist tax” is included or will be added.

• Compare stays: Even with an extra Dh50-100 total over a few nights, some hotels may still offer excellent value if the location and service are strong.

• Plan for flexibility: Although the levy isn’t live yet, it may roll out during your stay — being aware helps you budget smartly.

• Focus on value: London continues to offer rich experiences — from West End shows and Southbank walks to shopping on Oxford Street and dining in Soho — so the extra cost doesn’t diminish the appeal.

• Use local transport smartly: London’s public transit network is excellent. The levy revenues are aimed at supporting infrastructure, so you’ll likely benefit indirectly via smoother services.

Bottom line?

For travellers from the UAE, the potential levy is unlikely to change the cost or experience of visiting London in any meaningful way. London remains one of the world’s great travel destinations — and this move is simply about ensuring the city has the resources to support the millions of visitors who enjoy it every year.