Travel to the UK could be about to become more expensive under a plan to give local mayors the power to charge visitors a new ‘tourist tax’.

The Labour government’s proposed overnight levy is aimed at raising more money for local leaders, with the fee to be applied to all travellers regardless of nationality or the purpose of their visit.

The fee would be payable on hotel rooms, bed-and-breakfasts and holiday lettings.

London Mayor Sadiq Khan met the announcement of the proposed levy by saying it should be introduced “sooner rather than later”.

“A well-designed, modest levy has the potential to provide an important additional source of funding to support growth, strengthen London’s offer to visitors and help us remain globally competitive,” Khan said.

“It would allow us to reinvest in the places, infrastructure, culture and experiences that make London one of the world’s greatest cities to visit, while helping manage the pressures that come with welcoming tens of millions of visitors every year.”

In order to protect budget holidays, the UK government said the levy would be charged as a percentage of the cost of accommodation instead of a flat fee.’

While there is no official cap on the planned levy, Khan told the BBC that London would tax stays at 5 per cent.

A formal bill is due to be introduced in UK Parliament to establish the levy, and it could be in place by March 2028, according to the BBC.

There are concerns from industry bodies the new levy would turn some travellers away.

A week-long stay at a three-star hotel in London during the peak summer period costs on average between $1200 to $2000.

A 5 per cent tourist levy would add between $60 to $100 to the cost of accommodation.

That additional cost would increase incrementally as the standard of accommodation rises.

The UK-wide levy follows a special 5 per cent fee in the Scottish city of Edinburgh, applied to the cost of all paid overnight accommodation in July.

The Edinburgh levy is capped at five consecutive nights.

Manchester became the first English city to introduce a tax in 2023,  set at £1 ($1.90) per room, per night.

The Manchester levy is applied to any hotel or short-stay apartments in the city centre with an annual rent value of at least £75,000 ($141,000).

Local governments in Wales, meanwhile, will be able to charge up to £1.30 ($2.50) per person per night from April 2027.