UKHospitality said this was despite Government commitments to the House of Commons it would not introduce such a tax and estimated it would add £100 to the cost of a family two-week holiday during a cost-of-living crisis.
The levy set out in the speech would bring England in line with Scotland and Wales where local authorities can raise a tourist tax.
This comes after a poll of more than 10,000 Brits from the trade body found 56% were opposed to the tax compared to around a quarter (24%) who were in favour of it.
Furthermore, research from Oxford Economics found it would mean a £1.6bn tax increase for holidaymakers, cost 33,000 jobs, reduce GDP by £2.2bn, lose the Treasury £688m and reduce tourism spending by £1.8bn.
The trade association has written to each MP to tell them how many votes they risk at the next election, it said.
UKH chief executive Allen Simpson outlined the impact on both hospitality businesses and those wanting to holiday in the UK.
He said: “The Government has confirmed it will legislate to make family holidays more expensive during a cost-of-living crisis.
“It’s a shocking U-turn after it told both the House of Commons and UKH it would not implement a holiday tax.
“The facts are simple. A holiday tax will increase the cost of a staycation for Brits, it will hit lower income families hardest, it will lose the Treasury money and it will cost 33,000 jobs.
“A holiday tax is wildly unpopular, as well as economically destructive. Twice as many people oppose it, than support it, and voters are 10 times more likely to punish an MP who supports a holiday tax, than they are back them.”
Europe outlier
He added: “This tax, on top of the UK’s 20% rate of VAT, will make us an outlier in Europe. The tax on a holiday in the UK will become double many of our major rivals, who enjoy a much lower rate of VAT.
“It is nonsensical for the Government to go ahead with such an unpopular measure. There is still time for the Government to think again and stop the holiday tax.”
The Night-Time Industries Association (NTIA) responded to the King’s Speech and welcomed some measures but called for action and support for businesses.
CEO Michael Kill said: “The scale and ambition outlined [the] King’s Speech once again suggests a Government that recognises the depth of the challenges facing the UK. Commitments to strengthen public services, drive economic resilience, and support small businesses are welcome, but they are not new.
“We have heard this recognition and understanding repeatedly over the past two years. Yet, despite this, it has not translated into meaningful impact on the ground for businesses, including those across the night time economy who continue to operate under sustained pressure.
“We welcome the focus on reducing the cost of living, improving transport affordability, and supporting young people into employment. Measures such as capping bus fares, investing in youth employment, and reforming planning and infrastructure have the potential to positively impact our sector, but only if they are delivered at pace and with real intent.
“However, we must be clear, efforts to reduce the cost of living cannot come at the expense of businesses already operating on extremely tight margins. There is a real risk that the burden of affordability is inadvertently shifted onto operators through rising costs, regulation, and taxation. That is not sustainable, and it will ultimately undermine the very communities these policies aim to support.
“Recognition alone is no longer enough. What businesses need now is delivery.”
He called for Government action now to help businesses and create economic reform.
Immediate economic headroom needed
Kill added: “Strategies have been produced at pace, but the gap between what is written and what is delivered in terms of real, pro growth change remains significant and, frankly, well short of expectations.
“Over two years ago, this Government promised a fresh approach. Instead, we continue to see the same narrative, the same fiscal constraints ahead of budgets, the same cautious positioning, and the same lack of ambition in delivering bold economic reform.
“Crucially, growth will not come from long-term ambition alone. It requires immediate economic headroom for businesses to invest, hire and expand. That means taking decisive and, at times, difficult decisions now to ease the burden on operators. This is a moment that demands bravery from the government.
“Businesses cannot wait for long term strategies while operating on the edge today. What is needed is immediate action that restores confidence and creates the conditions for growth, not incremental change, but meaningful intervention.”
He described the emphasis on energy independence and long term reform as encouraging but warned many hospitality, nightlife and cultural firms would not survive to see the benefits.
“On public safety and policing, strengthening measures to tackle antisocial behaviour is important. But this must be balanced with policies that support, not restrict, vibrant night time economies, which play a critical role in safe and thriving communities,” the NTIA boss said.
“There are also missed opportunities. The Speech does not go far enough in addressing late night transport, cultural recovery, or the regulatory burdens that continue to constrain growth across our sector, particularly given the current economic climate, where many businesses are operating on the edge and may not survive long enough to see the benefits of long term reform.
“As highlighted in Jess Phillips’ recent resignation letter, ‘deeds, not words are what matter.’
“That sentiment increasingly reflects the mood across the UK. The success of this programme will not be judged on its ambition, but on whether it delivers real, tangible change.
“If the Government is serious about building a stronger, fairer Britain, it must move beyond recognition and into action. With bold, immediate intervention, the night time economy can be a powerful engine for growth, jobs, and cultural identity across the UK, but without it, the risk is continued decline.”
