By Jeff Hodgson, General Manager, Lumley Castle Hotel
What could it mean for the North East?
Visitors to the North East could soon be asked to pay a little more when staying overnight, following a major change in Government policy that gives regional mayors the power to introduce a new Overnight Visitor Levy.
And North East Mayor Kim McGuinness has already made it clear that she supports the idea.
The announcement means the North East could introduce a charge on stays in hotels, guest houses and other paid accommodation. The exact amount has not yet been confirmed, although figures of around £2 per night have previously been discussed in connection with the North East. More recently, Labour mayors have indicated that they expect levies to be around 5% or below, although the Government has not imposed a national cap.
So where would the money go?
At the moment, there is no final North East spending plan. However, Mayor McGuinness has previously argued that money raised should be invested directly back into the region’s visitor economy.
In June 2025, North East Mayoral Combined Authority papers recorded her support for an overnight levy, with the money being invested in major regional events designed to attract more visitors to the North East.
The Government’s latest announcement gives a broader indication of what the money could potentially support. It says revenue from the levy could be used for local services, public spaces and tourist attractions, helping areas deal with the pressures created by large numbers of visitors while also making destinations more attractive.
For the North East, that could mean investment in the things visitors – and residents – actually see and use: attractions, public spaces, events, cultural activity and improvements that make towns and cities more appealing places to visit.
There is certainly an argument for it. Tourism brings significant economic benefits to the North East, but visitors also place demands on public spaces, transport, streets and attractions. Supporters say it is reasonable for people staying overnight to make a small contribution towards maintaining and improving the places they are enjoying. But there are concerns too.
The hospitality industry has warned that an additional charge could make holidays and overnight stays more expensive and potentially make the North East less competitive with other destinations. Industry groups have also questioned whether a levy could discourage visitors or put additional pressure on already struggling accommodation businesses.
There is therefore an important question for Kim McGuinness and the North East Mayoral Combined Authority: if visitors are going to be charged, how exactly will every pound raised be spent?
For the scheme to win public and business support, transparency will be crucial. People will want to see a clear link between the money collected and improvements to the North East’s visitor economy.
The Government says mayors should have the new powers in place by March 2028, meaning the North East now has time to decide whether to introduce the levy and, if so, how it will operate.
A tourist tax is therefore no longer simply an idea being discussed. The power to introduce one is coming. The debate now moves on to the most important question: what will the North East get in return?
www.lumleycastle.com