A feasibility study into an Accommodation Business Improvement District (ABID) for Richmond has revealed potential for significant revenue generation but lacks sufficient support from the accommodation sector to proceed to a ballot.
The study, presented to the Finance, Policy and Resources Committee on Thursday 24 September 2026, indicated that an ABID could potentially generate between £300,000 and £900,000 annually. The feasibility report estimates that the development and set-up costs for a new ABID are likely to be around £10,000 + VAT, with additional costs depending on business plan specifications. These set-up costs could be recovered from eventual levy receipts if the ballot is successful. Collection costs for the levy would be approximately £30-£50 per hereditament, with extra charges for enforcement.
However, a lack of clear support from hotels and accommodation providers means the council will not be moving forward with developing an ABID at this time. While there was some agreement across accommodation providers regarding shared challenges, there was no clear support expressed for addressing these through a shared approach like the ABID model. While there was an understanding that increased shared resources would help deal with shared issues, there was mixed support for funding this through an addition to room rates. The feasibility report noted that While there was some agreement across accommodation providers as to shared challenges, there was no clear support expressed for addressing these through a shared approach such as the ABID model. There was an understanding that increased shared resources would help to deal with shared issues but mixed support for taking this from an addition to room rates.
Beyond the mandatory levy aspect, accommodation providers expressed concerns about losing business to other boroughs (particularly central London) and the difficulty of filling rooms on some nights, especially Sundays. Their view, ahead of any confirmation or indication of the outcome of the government's consultation and any resulting legislation at that time, was that a mayoral-led London-wide model could seem fairer and that any alternative proposals worked up would need to be clear on added value for money. The feasibility report stated, The providers worried about currently losing business to other Boroughs (particularly central London) and the difficulty of filling rooms on some nights, particularly Sundays. Their view, ahead of any confirmation or indication of the outcome of the government's consultation and any resulting legislation at that time, was that a mayoral-led London-wide model could seem fairer and that any alternative proposals worked up would need to be clear on added value for money.
Councillor Phil Giesler, Business and Growth Lead Member, expressed disappointment at the lack of positive response, noting that an ABID model allows accommodation providers to decide how funds are raised and spent. He highlighted that while Richmond may not have the critical mass of Manchester, which has a successful ABID, the visitor economy remains a clear lever for economic growth.
Steve Diamond, Assistant Director of Economy, Jobs and Skills, explained that the council would continue to engage with the accommodation sector to explore how the borough's visitor economy can be best promoted. Alternative models, such as a subscription model for Visit Richmond or advocating for revenue from a potential London Overnight Levy to be retained locally, are also being considered. A subscription model for Visit Richmond is being considered as an alternative to an ABID. This model would aim to provide a greater core budget for Visit Richmond and would offer a broader support base across the sector, reflecting a partnership approach. However, it would require a contribution model to be devised that accounts for differentiated ability to pay, and income levels would be less certain as partners might choose not to pay and leave the partnership. This differs from the ABID model, which is mandatory and sector-led in its governance and funding.
The government's proposals for the Overnight Visitor Levy are expected to be introduced from April 2028. Mayors and strategic authorities are expected to start publishing prospectuses detailing their plans, including rates and funding uses, next year. The London Borough of Richmond supports the levy in principle but has expressed strong disappointment that the government has not guaranteed that any revenue will come to boroughs. They will continue to push for at least 50% of the levy to be retained by the boroughs where it is raised. The report states, At the moment, the government's response to the consultation is looking at the levy being introduced from April 2028. And so they are expecting mayors and strategic authorities to start publishing a prospectus, setting out the details in their area, including the rates that will be applied and what it would be used to fund next year.
The feasibility study was commissioned following the Richmond Growth Plan's ambition to boost the visitor economy and increase overnight stays. Consultants Locus engaged with 26 hotels within the borough, finding that while there was agreement on shared challenges, there was no clear support for addressing these through a mandatory levy-based model.
The report also noted the government's announcement regarding powers for Mayoral authorities to establish an Overnight Visitor Levy. While the council supports this in principle, it has expressed disappointment that there is no guarantee of revenue returning to boroughs. The ABID development work has provided a benchmark for potential yield in the borough and how this could be reinvested locally.
Despite the lack of support for an ABID, the council remains committed to promoting the borough's visitor economy and will continue to explore options with the accommodation sector.
Read the full public reports pack for the Finance, Policy and Resources Committee meeting on Thursday 24 September 2026: Public reports pack
Read the agenda frontsheet for the meeting: Agenda frontsheet