A controversial £2 charge for overnight visitors to Liverpool has been given the green light to continue after a major legal challenge from hotel giant Whitbread plc, owner of Premier Inn, was rejected by the government.
Legal Challenge Dismissed
The visitor levy, which was first introduced on June 1, had been approved by the city's 83 hotels and serviced apartments that form the Accommodation Business Improvement District (ABID). However, in June, Whitbread plc appealed to the Ministry of Housing, Communities and Local Government to void the ballot result.
Following an official investigation, the government has now denied this request, allowing the charge to be fully implemented. The ministry confirmed that the receipt of the challenge did not suspend the effect of the original ballot.
Funding for Liverpool's Visitor Economy
The new system replaces the previous funding model for the BID, which relied on a business rates top-up. ABID estimates that the £2 city visitor charge could generate £9.2 million over two years.
A significant portion of this revenue, £6.7 million, will be allocated to a subvention fund designed specifically to support and enhance Liverpool's visitor economy. The £2 fee is managed and collected directly by the hotels and serviced accommodation providers, either when guests arrive or as they depart.
As a precaution during the legal proceedings, Liverpool Council, acting on advice from Whitehall, agreed with the BID that any funds collected under the new levy would be held by the authority until the challenge's outcome was determined. With the decision now made, the council will distribute these funds in line with the agreed business plan.
Industry Backing and Future Impact
Bill Addy, the Chief Executive of Liverpool BID, welcomed the government's decision. He emphasised that the process was entirely guided by the private sector board of hoteliers using Business Improvement District legislation to make a positive impact.
Mr Addy stated: "This has been a process entirely guided by the private sector board of hoteliers – who are using Business Improvement District legislation to make a difference for their industry and their city."
He further explained the levy's purpose: "As is stated in the business plan, this levy is to help generate more overnight stays. We know those visitors spend more in the visitor economy and hospitality industry. It is about creating a circular and sustainable visitor economy."
This summer, both Liverpool Council and the Liverpool BID Company had expressed confidence that the ballot was conducted in full accordance with all legal requirements, a position now vindicated by the government's ruling.
