North East hospitality businesses wary of tourist tax plans
Written by Jonny Thompson on 23rd September 2026
Grand Hotel, Tynemouth, one of the venues where there is concern over the potential impact of a tourism tax.
Hospitality businesses in Tynemouth have warned that a new tourist tax could make it harder to persuade visitors to stay overnight on the coast.
The warning comes after the Government announced plans to give regional mayors new powers to introduce an Overnight Visitor Levy on hotels, guest houses, B&Bs and other paid accommodation.
The proposed charge has already sparked concern among businesses in Tynemouth, Cullercoats and Whitley Bay, where overnight visitors are an important part of the local economy.
Gavin Groombridge, general manager of the Grand Hotel on Tynemouth seafront, said there were concerns about the levy being introduced at a time when families were already struggling with rising costs.
He said: “History tells us that once levies such as this are introduced they only ever go one way – and that is up.
“All at a time when families are already cutting back on holidays and weekends away because of the cost of living crisis”
Neil, from No 61 Front Street Guest House & Tea Room, said smaller hospitality businesses were already under pressure from rising costs.
He said: “Small hospitality businesses are still struggling following the pandemic, together with ever-increasing utility costs and increase in minimum wages etc.
“A tourist levy would be yet another nail in the coffin in discouraging visitors to stay – small business are struggling to stay competitive without the burden of an extra tax to pass on to their guests.
“Any suggestion of taxing this additional charge with VAT as revenue for a small business would be a slap in the face for hospitality businesses and should be avoided at all costs”.
The concerns come as Labour mayors across England, including North East Mayor Kim McGuinness, have said they would voluntarily cap any future levy at 5%.
The Government’s proposed system would allow mayors and strategic authorities to introduce a levy on overnight accommodation, with the money intended to be reinvested in local areas.
