North East Visitor Levy: Mayor Backs Overnight Stay Charge

North East Mayor Kim McGuinness says a charge on overnight stays would let the region compete with rival destinations. She spoke after the Government put a Bill before Parliament on Wednesday that would give mayors the power to bring one in.

Her statement names no rate and no start date. It does not mention North Tyneside either, but the North East authority covers the borough, so any levy she introduced could reach hotels, guest houses and holiday lets in Whitley Bay, Tynemouth and Cullercoats.

In a statement sent to Whitley Bay News by the North East Combined Authority, Ms McGuinness said:

“The North East has vibrant cities, stunning coast and countryside in Northumberland and Durham and a welcome that keeps people coming back. A levy here will mean we can compete with rival destinations which already raise money from visitors.

“We want to double the scale of our tourist economy and create thousands of new jobs as we do so. A small amount raised on each overnight stay means we can bring more major festivals to our region, support brilliant local events, improve the visitor experience and showcase the North East to the world.”

What the Bill does

The Visitor Levy (England) Bill had its first reading in the Commons on 4 November. It still has to pass through Parliament.

The Government’s announcement sets out how the charge would work:

• It must be a percentage of the cost of the accommodation, not a flat fee, so cheaper stays pay less.
• It applies only to the first 28 consecutive days of a stay.
• Hotels and other accommodation providers account for it and pay it.
• People who only rent out a spare room occasionally pay it only if they earn above a set amount, which mayors can adjust.
• The money stays in the area, and authorities must publish a yearly report on what they raise and spend.

Ten mayors have committed that any levy in their area would be no higher than 5%. The Government’s announcement does not name them, and Ms McGuinness’s statement does not give a figure. As an illustration of the arithmetic only, 5% of a £100 room would be £5 a night.

Housing Secretary Angela Rayner said: “Every pound raised through these levies will stay in the local area. Whether that’s better transport, thriving high streets, or more attractions that keep visitors coming back.”

What it means for you

If you run a hotel, guest house or holiday let: you would be the one liable for the levy. The Government’s response to its consultation, published in September, says providers may choose to pass some or all of the cost on to guests. Meals and other non-accommodation costs should be left out of the calculation.

That response also said an authority could not vary its rate by season, accommodation type or council area. On that basis, a seafront guest house in Whitley Bay would charge the same percentage as a city hotel in Newcastle.

If you want a say: a mayor wanting a levy must first publish a draft plan and an impact assessment. These have to set out the proposed rate, threshold, exemptions and how the money would be spent. Local people and businesses must then be consulted, and the responses published, before a final decision.

Members of the authority can suggest changes to the plan, and the mayor has to consider them.

If you live here and do not stay in paid accommodation: nothing changes for you. The charge falls on overnight stays, and the Mayor’s stated aim is to spend the money on festivals, local events and the visitor experience. The authority already runs a separate Mayor’s Events Fund, with first-stage bids due by 26 November.

Who is exempt

The Government has confirmed these national exemptions:

• student accommodation
• care homes and children’s homes
• school boarding houses
• temporary accommodation, shelters and refuges

Mayors can add a limited number of local exemptions, such as camping pitches. September’s response also named touring caravan pitches and hostels as possible candidates, subject to local consultation.

What other places have done

In Greater Manchester, a £1 per room per night charge through a Business Improvement District began in 2023. The Government says it raised £2.8 million in its first year.

The Liverpool City Region’s Mayor, Steve Rotheram, says a modest levy could raise up to £18 million a year there. We have seen no equivalent estimate for the North East in this week’s announcements.

What happens next

In its September response, the Government said that, subject to Parliament’s approval, it expects local leaders to be able to set out plans for spending the money by March 2028. Whether and when a North East levy would start is a decision for the Mayor after that consultation.