New analysis indicates that proposed hikes in UK visa fees could significantly impact the country’s tourism economy, potentially reducing visitor spending by £1.15 billion by 2030.
The findings, released on January 24 by market intelligence firm IndexBox and reported by The Telegraph, have raised concerns among hospitality and retail leaders.
The Home Office has proposed increasing the standard two-year multiple-entry visit visa fee from £475 to £506.
Additionally, the new Electronic Travel Authorisation (ETA), which will become mandatory for certain travelers in February 2026, would see its cost rise from £16 to £20.
While the increases appear modest individually, industry representatives warn that the timing is particularly challenging. The UK’s hospitality sector is still recovering from pandemic-related debt and high operational costs.
Kate Nicholls, chief executive of UKHospitality, described the fee adjustments as “a deliberate act of economic self-harm,” emphasizing that foreign visitors contribute more in spending at restaurants and pubs than the UK earns from food and drink exports.
Luxury department store Fortnum & Mason echoed these concerns, arguing that Britain should encourage, rather than deter, high-spending international visitors.
The affected markets include travelers from India, China, and South Africa, who require visit visas, and are highly sensitive to price changes.
Meanwhile, nationals from the United States, Canada, Australia, and most European Union countries, who currently enjoy visa-free travel, will also be required to pay the ETA starting February 2026.
Tourism operators and airlines caution that the combined effect of rising visa costs, inflation in airfare, and a strong pound could make mainland Europe a more attractive destination for leisure travelers.
The Home Office has defended the proposed fee increases, stating that additional revenue will support border modernization efforts and help cover this year’s £4 billion asylum accommodation expenses.
Officials note that visa fees have remained frozen since 2022 and remain competitive when adjusted for currency fluctuations.
Nonetheless, Treasury modeling suggests that the policy could have net negative economic effects unless the UK achieves an ambitious target of 50 million visitors annually by 2030, up from 38 million in 2023.
Corporate travel managers are advised to factor in higher compliance costs for short-term assignments and include ETA fees when budgeting projects involving non-visa nationals.
Parliamentary scrutiny is ongoing, with MPs on the Business and Trade Committee requesting a detailed impact assessment to weigh potential revenue gains against possible losses in VAT, duty-free sales, and jobs in tourism hubs outside London.
For travelers and businesses, VisaHQ continues to offer support in navigating UK visit visas and the new ETA system, handling document preparation, fee updates, and submission processes to simplify compliance.
