British families could face charges of up to £300 on domestic holidays under Labour's newly announced Overnight Visitor Levy Bill, which was unveiled during this month's King's Speech, ahead of a heatwave over this bank holiday weekend.
The legislation would hand regional mayors and local authorities powers to impose taxes on overnight accommodation, with 10 of England's 14 regional mayors now planning or actively considering introducing the levy.
The proposals come as UK temperatures are forecast to climb as high as 33C over the bank holiday, raising the prospect of breaking the 32.8C May record set in Camden Square in 1922.
Health agencies have issued heat alerts as conditions are expected to remain hot and dry across much of England from Friday into next week.
Forecasters say the UK could see its hottest day of the year so far, with temperatures surpassing those in several Mediterranean destinations.
Popular destinations from Whitby to Sandbanks fall within areas backing the proposals, with Yorkshire, the North East, the West Country and large parts of the Midlands represented among supportive mayors.
The regions collectively attract 37.5 million domestic trips each year, accounting for almost 40 per cent of Britain's internal tourism market.
Smaller councils including Bath, Bournemouth, Oxford and North Norfolk, are also considering introducing the charges under the proposed framework.
The hospitality industry has condemned the plans, warning the levy could damage domestic tourism and place additional strain on businesses already facing mounting costs.
Research carried out by Oxford Economics for UKHospitality and published last week projected the tax would lead to the loss of 33,000 jobs while reducing tourism spending and contributing to a £2.2billion decline in Gross Domestic Product (GDP).
Tourism currently accounts for five per cent of the British economy and supports 2.4 million jobs across the country.
Labour Overnight Visitor Levy Bill could see families charged up to £300 on UK holidays
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The sector is growing at 9.3 per cent annually, outpacing wider economic growth, according to figures from VisitBritain.
Industry figures have warned the levy could encourage holidaymakers to travel abroad instead of taking breaks within the UK.
Business leaders in Cornwall have previously warned growing anti-tourism sentiment risks discouraging visitors and harming local economies heavily dependent on the sector.
Three regional mayors have publicly rejected the proposed powers and said they would refuse to introduce the charges in their areas.
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Reform UK's Lincolnshire mayor , Andrea Jenkyns, said: "At a time when British families are already struggling under the weight of this Labour Government's policies, the last thing they need is a tax on their hard-earned holidays."
She added hospitality businesses were already "pushed to the brink" and needed support rather than "more financial hurdles".
Fellow Reform UK mayor Luke Campbell has also ruled out introducing the levy in Hull and East Yorkshire.
Conservative Tees Valley mayor Ben Houchen described the proposal as "yet another cash grab" and said: "If Labour hands me these powers, I won't use them."
Mr Houchen also stressed he would never introduce a mayoral tax in the region.
Labour is currently considering two different models for the levy, including either a percentage-based charge on accommodation costs or a flat nightly fee.
Amsterdam's 12.5 per cent tourist tax rate has emerged as one potential benchmark, which would add £345 to a typical £2,765 week-long family holiday, data from Go.Compare shows.
Lower rates of seven per cent, similar to the system used in Aberdeen, or five per cent, as applied in Edinburgh, would still increase costs by £193 and £138 respectively.
A flat fee model of either £1 or £2 per night, similar to schemes already operating in Manchester and Liverpool, would add around £112 to a two-week stay, estimates from UKHospitality reveal.
Labour has confirmed accommodation providers would usually pass the additional costs directly on to guests booking overnight stays.
Ministers have not yet confirmed whether a national cap on the charges will be introduced, as operates in Wales, or whether local authorities will be allowed to set uncapped rates similar to the system in Scotland.
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