Bacta Warns Overnight Visitor Levy Could Lead to Large Losses

Amusements and low-stakes gambling trade body Bacta has publicly opposed the introduction of an Overnight Visitor Levy in England, arguing this could lead to economic footprint losses between £14 million and £28 million.

Between last November and February 18 this year, the UK government ran a consultation on the prospect of giving Mayoral Strategic Authorities in England the power to create local overnight visitor levies. This legislation was announced in the November Budget by Chancellor Rachel Reeves.

The consultation document mentioned a range of commercially-let short-term accommodation venues which would fall within the scope of the levy.

These include: hotels; bed and breakfasts; guesthouses; hostels; campsites and caravan parks; self-catering properties; serviced apartments; university halls; and accommodation in a vehicle which is permanently situated in one place.

How does this affect Bacta?

This impacts Bacta as its members rely heavily on the revenue they generate from tourists in seaside and coastal areas. Bacta has particularly singled out family entertainment centres (FECs), stating they are already under sustained economic pressure.

Research commissioned by Bacta and produced by the Centre for Economics and Business Research (Cebr) showed FECs generated £804 million in turnover in 2024 and supported 14,049 jobs.

In a submission to the government, Bacta has pointed out there has been a prolonged period of contraction for the sector, with real-term turnover dropping by 25% between 2015 and 2024, and operating profits dropping 18% in the same period. Bacta also forecast operating profits will have fallen by a further 29% between 2023 and 2024.

Allaster Gair, Bacta’s Director of Communications, said:

“The majority of Bacta members are SMEs [small and medium-sized enterprises] operating in seasonal, weather-dependent, and price-sensitive destinations that are heavily reliant on domestic overnight tourism. Any proposals that jeopardise what is a fragile business environment have to be considered in forensic detail.

“It should be stressed that the impact goes beyond Bacta member businesses and the people they employ. Cebr estimate that for every £10 of GVA [gross value added] directly generated by seaside arcades, a further £10.55 of GVA is supported in the wider economy. Additionally, for every 100 jobs directly generated, a further 61 are supported across the wider economy.”

No set rate yet

While the government’s consultation looked into how levy rates should be calculated and the powers strategic authorities would have to change them, it is currently unclear what the levy rate would be. The government considered whether there should be a minimum threshold above which providers become liable for the levy.

The rate structure would either be a percentage of accommodation cost or a flat rate charge, which could either be per person or per room, per night. The government has proposed local leaders should set levy rates within their areas, potentially within certain limits, but these would be subject to consultation responses.

According to Bacta’s modelling and research from UK tourism industry trade association Tourism Alliance, even modest levies would reduce overnight demand by between 1% and 2%; this could lead to a direct loss of annual turnover for the seaside arcade and FEC sector of between £6.4 million and £12.9 million.

Gair said:

“Many visitors to seaside towns are domestic families with fixed holiday budgets and we believe that access to leisure and important family time should be protected, particularly for those who are on tight family budgets.

“Bacta would welcome further engagement as the department considers the responses to this consultation and we are more than happy to explain our arguments in greater detail, expand on the research that underpins our empirical arguments and provide any further information to help inform the debate.”