West End chiefs say they would prefer a London tourist tax to be a fixed rate if as expected it is introduced.
Chancellor Rachel Reeves is set to give Sir Sadiq Khan and other mayors the power to impose a tourism levy.
The London Mayor would consult with hotels and other affected sectors about the details of a tourist tax for the capital which could raise £250 million a year.
The levy would be expected to apply to Airbnb-style accommodation as well as hotels.
The tax could be a series of fixed rates depending on the type of hotel, as happens in Paris, a fixed flat rate for all accommodation as in Lisbon, or a percentage of the cost of the room as in Berlin.
Dee Corsi, chief executive of the New West End Company, which represents businesses in this tourism quarter, stressed: “A future overnight visitor levy must be proportionate and affordable, otherwise it risks harming the tourism ecosystem it is meant to support.
“That’s why we’re calling for a clear, fixed fee, similar to schemes in Lisbon, Paris and Barcelona, not a percentage-based levy.”
She added: “Every pound raised must be reinvested directly into improving the visitor experience. The Mayor has made that commitment and businesses will hold City Hall to it.”
In Scotland, Edinburgh is introducing a tourist tax of 5% of the cost of a room, which will apply from next July, and will be charged on the first five nights of a visitor’s stay.
Glasgow is also bringing in a 5% levy, and Aberdeen 7%.
Berlin applies a 7.5% tourist tax on the cost of the accommodation.
But hotel prices are far higher in London than in Scotland, Berlin and many other European cities and a 5% levy would put on average £11.50 a night on the cost of staying in the capital, with the average hotel price being £230, according to industry research, though this varies depending on the time of year.
In Paris, the tourist tax is fixed for different types of accommodation, including 3.25 euros (£2.86) for an overnight stay in a two-star hotel and 8.45 euros (£7.43) for a four-star hotel.
Lisbon has a flat four euros (£3.52) levy, up to a maximum of seven nights, or 28 euros (£24.67) for all types of accommodation.
Sir Sadiq has backed a tourist tax, promising that the money raised would be reinvested to boost tourism, and arguing that people “don’t really mind paying the extra few euros” when they visit other European cities.
Antonia Jennings, chief executive at the Centre for London, said: “We strongly support the implementation of a tourist levy at a competitive rate - but to be effective, it must be placed in statutory legislation and devolved to the Mayor of London.
“This is to ensure the proceeds are spent where need is greatest across the capital, and not just in central boroughs, which will raise the majority of the levy.”
In her Budget on November 26, Ms Reeves is set to hit owners of expensive homes, many of them in London, either with a “mansion tax”, by raking in more from higher council tax bands, or through other measures.
She is also widely expected to impose another two-year freeze on income tax thresholds, dragging a further 480,000 people in London and the wider South East into paying the 40% higher rate of income tax.
Other measures could include a more hefty bank levy, restrictions on pension salary sacrifice schemes, a new road levy for electric vehicles, and limits on a salary sacrifice scheme for cyclists to buy bikes.
