A tourist tax could ruin what makes London the greatest city in the world
London must be well equipped to win over visitors who might otherwise spend their time and money elsewhere, writes Dee Corsi
London is one of the greatest cities in the world – a statement borne out this week in a new landmark report, ‘Unlocking the London Advantage’, which benchmarks the capital against twelve other leading global cities, from New York and Paris to Tokyo and Dubai.
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The analysis revealed that London is the most consistently competitive performer on the global stage, ranking in the top five for culture, tourism, innovation and investment appeal. Yet the capital ranks last among peer cities for policy competitiveness, raising concerns that the current policy environment, if left unchanged, will erode its tourism and growth advantages.
And, according to the index, there are several advantages to leverage – particularly across the visitor economy. In the index’s cultural ranking, London is an indisputable powerhouse, neck-and-neck with Paris in joint first place and pulling decisively away from its next-closest European competitor, Barcelona.
When it comes to tourism and hospitality, London ranks among the top three, after New York and Dubai. The capital’s strength in luxury hotels, boasting world-renowned names like Claridge’s and The Connaught, is a clear differentiator from other cities. Demand is also strong; average daily hotel rates rose 6% year-on-year across 2025, double the all-index average. This is felt most keenly in the West End. Known worldwide as a global tourism hub, the district saw international visitor volumes grow by a staggering 11.8% last year, even as international arrivals into the capital fell by 3.1%.
But the report also reveals that, compared with other global cities, London is the third most expensive for a three-night break, at £690, versus the all-index average of £500. It is also one of only four cities without a shopping incentive scheme for international visitors, and it lacks the late-night weekend shopping hours which are standard in Tokyo, Dubai and Paris. These are competitive disadvantages London can no longer afford to ignore.
This research should be the canary in the coal mine for policymakers. Any additional burdens – on the businesses that shape our visitor experience or on visitors themselves – should be carefully designed. The proposed overnight visitor levy is a prime example. Already the third most expensive city for a long weekend, it’s critical that any additional taxes on London’s visitor economy are co-designed with hospitality businesses and visibly elevate the visitor experience in the location where funds are raised.
In a competitive global marketplace, London must be well equipped to win over visitors who might otherwise spend their time and money elsewhere. Indeed, our latest on-street consumer data from the West End shows just how global a marketplace London is competing in; Paris, New York and Dubai were the top three destinations visited or planned by international visitors to the West End, with preferences shifting to Abu Dhabi, Hong Kong and Dubai for high-spending visitors. These are all cities looking to attract visitors with incentives our capital does not currently offer.
It doesn’t need to be this way. The government has publicly recognised the value of our visitor economy – but despite this, recent interventions, like a VAT cut for ‘summer experiences’, do not go far enough. There has also been a siloed focus on regional tourist hubs, whilst London, our indisputable global gateway city, has been left to fend for itself.
We would argue that, in addition to giving coastal towns and struggling high streets the attention they need, ministers should look to areas where small policy changes can have an outsized impact – on tax receipts, job creation, and international perceptions of the UK.
As one of the world’s most recognised commercial, cultural and tourism districts, the West End provides the best opportunity for that change to begin. The district has a track record of innovative partnership working and is where London’s advantages converge and constraints bite the hardest. Here, targeted policy interventions to improve our visitor economy and experience would see the biggest gains – for London, and for the country.
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Dee Corsi is Chief Executive at New West End Company.
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