Asylum hotels dodge Burnham’s visitor levy sparking hospitality row
Migrant hotels housing asylum seekers will be exempt from Andy Burnham's new "tourist tax", it has emerged, deepening controversy over a levy that critics say unfairly burdens British holidaymakers and hospitality businesses. The Prime Minister recently granted regional mayors the power to impose an uncapped "overnight visitor levy" on stays in hotels, B&Bs and holiday lets, with the charge based on a percentage of accommodation costs rather than a flat fee. The Department for Housing, Communities and Local Government has confirmed the tax will not apply to taxpayer-funded migrant hotels, as these are classified as "temporary accommodation" — a decision the hospitality industry says removes any incentive for such hotels to take paying guests instead.
Labour-run areas are expected to set the levy at around 5 per cent, adding £100 to a £2,000 family holiday, while people visiting relatives in hospital could also be caught by the charge. Oxford Economics figures cited by UK Hospitality suggest that by 2030 the levy could cost the Treasury £688 million in lost tax receipts, £101 million in reduced hospitality investment, 11.9 million fewer overnight stays and 33,000 jobs, amid an overall £1.8 billion hit to tourism spending. There are currently 160 migrant hotels in the UK plus 73,068 asylum seekers in other taxpayer-funded accommodation; the Conservatives, including shadow home secretary Chris Philp and shadow chancellor Andrew Griffith, have branded the exemption "utterly outrageous" and accused Labour of taxing struggling families while sparing the asylum system.
In short
- Migrant hotels exempted from Burnham's new uncapped tourist tax
- Levy could add £100 to a £2,000 family holiday
- Tories call exemption "outrageous", say it favours asylum hotels over families
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Exempting asylum hotels could reflect their different purpose: they provide temporary accommodation commissioned and paid for by the state, rather than selling stays to visitors. Applying a visitor levy to publicly funded placements might simply move money between public budgets, while adding administrative costs and potentially complicating the provision of accommodation.
The case against
The exemption can appear inequitable when ordinary hotels, holiday lets and their guests may face an added charge, while publicly funded accommodation is excluded. Hospitality businesses may also argue that the distinction weakens fair competition if asylum hotels could otherwise host paying guests, and that the levy risks discouraging tourism, investment and jobs.
Explained simply
An overnight visitor levy is a charge on people staying in places such as hotels, bed and breakfasts and holiday lets. The Government has given regional mayors, including Greater Manchester mayor Andy Burnham, the power to introduce one; the amount could be linked to the cost of a stay.
Hotels paid for by the Government to house people seeking asylum are classed as temporary accommodation, so they will not pay the levy. The Home Office arranges this accommodation while asylum claims are considered, and the decision has prompted questions about how those hotels are treated compared with businesses taking paying guests.
The levy could affect holidaymakers and other visitors who need overnight accommodation, while hospitality businesses say it may reduce stays and tourism spending. The dispute is also political: Conservative figures have criticised the exemption, while the wider debate concerns how the charge is designed and who should pay it.
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Originally published by Daily Mail as “Fury as migrant hotels to be exempt from Andy Burnham’s tourist tax after PM was accused of raiding struggling Britons with levy”.