Britain’s hard-pressed holidaymakers are once again being asked to pay more, while hotels housing asylum seekers are let off the hook entirely – the latest example, critics say, of a two-tier Britain under Labour.
According to reporting by Charles Hymas in The Telegraph, the Department for Housing, Communities and Local Government has confirmed that the new “tourist tax” being rolled out by mayors across England will not apply to taxpayer-funded hotels used to house asylum seekers, because they have been classified as “temporary accommodation.” Ordinary hotels, B&Bs and holiday lets housing paying guests will not enjoy the same exemption.
The levy itself was announced this week, giving Labour mayors the power to impose an uncapped “overnight visitor levy” on hospitality businesses. The hospitality industry had reportedly been expecting the tax to come with a cap, and was blindsided by both its unlimited scope and the carve-out for migrant accommodation. Industry figures have warned the exemption effectively rewards hoteliers for housing asylum seekers over holidaymakers, distorting the market against ordinary paying guests.
Families to pay, migrants exempt
Under the new rules, Labour mayors (including London’s Lord Khan, Liverpool’s Steve Rotheram and the North East’s Kim McGuinness) are expected to set the levy at around 5 per cent, adding roughly £99 to a week-long family break in the capital, or about £198 for a longer summer holiday, according to figures from UKHospitality cited by the Telegraph.
Even visitors staying in a hotel to be near a sick relative in hospital could be liable for the charge, despite not being tourists in any meaningful sense.
Meanwhile, school trips could also be caught by the tax unless individual mayors choose to exempt accommodation “often used for educational purposes,” such as hostels and campsites, a decision left entirely to local discretion rather than applied consistently nationwide. Business travellers attending conferences and trade shows will also have no exemption.
By contrast, the roughly 160 hotels currently housing asylum seekers (plus a further 73,068 migrants in other state-funded accommodation) will pay nothing extra, because the Government has ruled that this counts as “temporary” housing rather than tourism.
Tories say policy is “outrageous”
Shadow Home Secretary Chris Philp was scathing, accusing the Government of treating British taxpayers “as a cash machine” while giving asylum hotels “special treatment.” He argued the real solution was to remove illegal immigrants from the system altogether, ending the reliance on hotel accommodation rather than taxing British families instead.
James Cleverly, the former shadow housing minister, went further, branding it a “perverse policy” to tax hotels for hosting genuine visitors, people who spend money in local economies and support jobs, while migrants housed at taxpayer expense pay nothing at all.
A policy branded “ludicrous” by readers
The story has provoked a furious reaction online, with readers across social media and comment sections branding the exemption “ludicrous” and pointing out the apparent absurdity of the Government’s logic – many noting that, by any common-sense definition, every hotel stay is “temporary accommodation,” whether the guest is a tourist or an asylum seeker. Others accused ministers of effectively incentivising hoteliers to house migrants rather than paying customers, warning it could squeeze ordinary holidaymakers out of the market altogether. There was also widespread anger at the idea that grieving or worried families visiting sick relatives in hospital could be taxed as “tourists,” while the Government’s own asylum accommodation escapes the levy entirely.
The numbers
The Telegraph reports that the number of asylum seekers in hotels has fallen from a peak of 56,000 across 400 hotels in September 2023 to around 16,021 today, down from 29,561 when Labour took office in July 2024, though this has been achieved largely by shifting migrants into private rented housing and former military sites, not by reducing the overall asylum population being supported by the state. More than half of asylum seekers currently housed have entered the UK illegally, the majority via small boat crossings of the Channel.
Worth reading original article in full: https://www.telegraph.co.uk/news/2026/09/11/migrant-hotels-exempt-from-tourist-tax/
Image: For illustration purposes
