Travel industry chiefs have expressed their alarm at plans for a London tourism tax, saying it would be disastrous.
The London Assembly is asking for devolved powers to levy a tax on visitors.
Speaking at London’s World Travel Market this week, Ufi Ibrahim, chief executive of the British Hospitality Association (BHA), said the idea was one ‘that gives great concern’.
"The UK is are already 140th out of 141 countries in terms of competitiveness and VAT is double what it is in many other countries. Whichever way you look at it, we are unable to compete," she said.
"The question is who are we taxing when 88% of tourists are hard-working Brits that stay one night in London and do a trip to the theatre."
Tom Jenkins, chief executive of the European Tourism Association ETOA, added: "No city imposes a tourism tax unless it is absolutely desperate."
Industry figures also argued that any tax would be difficult and expensive to collect and, under UK law, cannot be ring fenced to fund tourism infrastructure and services.
Ibrahim said even without a tax, tourism businesses in the capital faced cost pressures, particularly business rates.
"At the moment, we are competing with two hands tied behind our backs. At least release one hand," she said.
She said her ‘single silver bullet’ would be to reduce VAT on tourism services and accommodation, which is currently levied at the standard 20% to 5%.
The lost taxation would be recouped within two years as the number of visitors increased, she added.
