As local councils across the United Kingdom grapple with funding shortages, millions of tourists could soon be asked to pay mandatory levies on overnight stays to help fund essential services in popular destinations. The move, known as a “tourist tax,” is gaining traction as cash-strapped authorities seek new revenue sources to cope with the impact of surging visitor numbers on local infrastructure and amenities.
Scotland and Wales Lead the Charge
Nearly half of Scotland’s local councils are considering implementing a tourist tax, with hotspots like Skye, the Callanish stones on Lewis, and Orkney’s neolithic sites particularly overwhelmed by the influx of visitors. Highland council, home to iconic attractions such as the fairy pools on Skye and Glenfinnan viaduct, has launched a consultation on a proposed 5% levy on all overnight stays, which could come into effect as early as late 2026.
Meanwhile, the Welsh government is set to announce similar proposals on Monday, following the lead of major European cities like Berlin and Barcelona. Ministers in Cardiff argue that the extra funds raised through a visitor levy would enable councils to invest in tourism infrastructure and amenities, especially in the most popular areas such as Gwynedd, Pembrokeshire, and the capital city.
Edinburgh Blazes the Trail
Edinburgh is poised to become the first place in the UK to introduce a mandatory tourist tax, with a 5% surcharge on overnight stays set to take effect in July 2026. The city expects to generate up to £50 million annually, which will be invested in improving public parks, funding festivals, and building new social housing to mitigate the impact of skyrocketing house prices driven by the short-term rental boom.
Edinburgh councillors say the new tourist tax will help build much-needed council housing.
Addressing the Costs of Overtourism
The push for tourist levies comes as destinations struggle with the costs associated with “overtourism.” Scotland’s North Coast 500 route, immensely popular with British holidaymakers, was recently added to Fodor’s “No List” due to its unsustainable popularity. Motor homes choke narrow roads, waste is dumped on rural verges, and campsites are overwhelmed during peak season.
Ken Gowans, Highland council’s economy and infrastructure chair, emphasized the need for a sustainable tourism offer in the region:
Right now, we don’t have a sustainable tourism offer in the Highlands. The cause of the wear and tear isn’t local people, but they’re having to pay for it through their council tax. With this money, we can not only maintain services and infrastructure but improve them. We welcome tourists openly, but if we want people coming back, we should enhance their experience.
– Ken Gowans, Highland Council
Industry Reactions and Visitor Experience
While some hoteliers and tourism businesses have expressed concerns that a levy could deter visitors and increase red tape, many recognize the need for investment in the places they operate. VisitScotland, which supports the levy, believes that a well-designed policy would allow tourism firms to help shape the scheme and ensure that it benefits both visitors and local communities.
Tourism should be good for everybody. It should be good for the visitor, it should be good for the businesses, and it should be good for the places they visit. This type of long-term investment [from the levy] should help grow the value of the visitor economy.
– Rob Dickson, VisitScotland
The Lake District Dilemma
The Lake District, another iconic UK destination, is also grappling with the challenges of mass tourism. A recent report by the Friends of the Lake District charity found that the area’s 18 million annual visitors place an “invisible burden” on the environment and local communities, with infrastructure like wastewater treatment plants often scaled only to serve the resident population of around 40,000.
To address this imbalance, the charity has suggested that visitors could be charged for bringing a car or staying overnight. Michael Hill, the chief executive of Friends of the Lake District, emphasized that the aim is not to deter tourists but rather to generate funds for much-needed improvements:
We are not anti-tourist. We’re not saying, let’s tax tourists to keep them away, absolutely not. Quite the opposite; in most of the places around the world that we’ve looked at that have brought in some sort of tourism levy, tourism numbers have actually increased because the place gets better.
– Michael Hill, Friends of the Lake District
Balancing Tourism and Sustainability
As the debate over tourist levies intensifies, UK destinations are grappling with the challenge of balancing the economic benefits of tourism with the need to protect local communities and the environment. While the specifics of any scheme will likely vary from place to place, the overarching goal remains the same: to ensure that tourism is sustainable, equitable, and beneficial for all stakeholders.
With millions of visitors potentially impacted by these proposed changes, the coming years will be crucial in shaping the future of UK tourism. As local authorities, businesses, and communities navigate this complex landscape, the hope is that a well-crafted tourist levy system could help safeguard the country’s most cherished destinations for generations to come, while also enhancing the visitor experience and supporting local economies.
