On 10 September 2026 the government announced that mayors in England will be given the power to charge a levy on overnight stays. It has already been nicknamed the tourist tax. The West Midlands mayor is one of those who has welcomed the announcement, so this is not a story about London and York. It is a story that could reach Coventry.
If you own a property in Coventry that you let on Airbnb, Booking.com or as serviced accommodation, here is what has actually been announced, what is still unknown, and what we would suggest doing about it.
What has been announced
Mayors in England will be able to introduce a charge on overnight accommodation. Three details matter more than the headline.
It is a percentage, not a flat fee. Unlike the voluntary schemes already running in Manchester (£1 per room per night) and Liverpool (£2 per night), this would be calculated as a percentage of what the guest pays. Charge more per night and the levy is bigger.
There is no upper limit written into the plans. The government says lower cost accommodation will always pay the lowest levy, but no cap has been set. For comparison, Edinburgh charges 5% and caps it at five nights, and Wales is bringing in £1.30 per person per night from April 2027.
Mayors can grant exemptions, but not by area. They will be able to exclude certain types of accommodation, campsites being the example given, but they cannot exempt one town within their region while charging in another.
The legislation has not been written yet. The government has said a bill will come before Parliament in due course, and local leaders have until early 2028 to set out how the money would be reinvested. So nothing is changing this year.
Would it apply to an Airbnb in Coventry?
This is the honest answer: probably, but it has not been confirmed.
The announcement refers to hotels, bed and breakfasts and other types of accommodation. In Edinburgh, where a comparable scheme is already running, self catering accommodation is included alongside hotels and B&Bs. On that basis it would be surprising if short term lets were left out, particularly since including them is one of the arguments councils tend to make for fairness between hotels and Airbnbs.
But nobody can point you to a line of legislation today that says so, because the legislation does not exist yet. Anyone telling you definitively that your Coventry Airbnb will or will not be caught is guessing.
What it might cost you
Take a Coventry property letting at £90 a night with an average stay of two nights.
At a 5% levy, the guest pays an extra £9 per booking. Over 120 nights a year that is roughly £540 flowing through your listing.
The trade body UKHospitality estimates the levy would add somewhere around £100 to £120 to a typical family holiday in England, and its chief executive Allen Simpson warned that “jobs are now at risk”. The Conservatives have made the point that VAT at 20% already applies to accommodation and would apply to the levy on top.
The counter argument from government is that the money would go into local transport, high streets and the attractions that bring visitors in the first place. For a city that has invested heavily in its arena, its universities and its city centre, that argument is not nothing.
The part that actually affects your income
Here is the thing most coverage misses. The levy is paid by the guest, not by you. But it does not arrive out of thin air.
Guests compare total price. If a Coventry stay becomes 5% more expensive at checkout, some proportion of bookings go elsewhere, or the same guests book fewer nights. In practice a levy tends to be absorbed partly by the visitor and partly by the host through softer occupancy or a nightly rate that has to come down to stay competitive.
That matters more in a market like Coventry than it does in York or Edinburgh. A city with a large leisure tourism draw can push price. A city where a good share of stays are contractors, hospital visitors, university families and event traffic is more price sensitive, because those guests are comparing you against a Premier Inn and a spare room, and they are often spending their own money.
What we would do now
Nothing drastic. There is no legislation, no date and no rate. Making decisions now would be reacting to a headline.
Know your numbers before it lands. If you cannot currently say what your occupancy and average nightly rate were last year, and what they are trending at this year, you will not be able to tell whether a levy has hurt you or whether something else has. Most hosts we speak to are surprised by their own figures when they finally look.
Watch the West Midlands specifically. The mayor has welcomed the announcement but has not committed to a rate or a timetable, and several mayors have said they will consult first. That consultation is where short let owners get to make the case for how the levy treats small operators differently from hotel chains.
Think about your mix. If a levy would bite, the properties most exposed are the ones with thin margins and high price sensitivity. This is worth knowing before it happens rather than after, and for some owners it will be one more input into the long running question of whether a property earns more as a short let or on a long tenancy.
Where we stand
We manage short lets in Coventry as well as long term tenancies, so we have an interest in this. We would rather say that plainly than pretend to be neutral.
Our view is that a levy in the West Midlands is more likely than not within the next few years, that it will probably include short term lets, and that the rate matters far more than the principle. A capped 2% is an irritation. An uncapped 8% would change how some Coventry properties are best used.
If you own a short let in Coventry and want to talk through what your own numbers look like, or whether the property would do better on a long tenancy, we are happy to go through it with you. No charge and no obligation.
Source: England’s mayors to get power to impose tourist tax, BBC News, 10 September 2026.
This article is general information, not tax or legal advice. The proposals described have not yet been made law and the detail may change.
