A proposed “tourist tax” on hotel guests in Cambridge has been rejected by hotel owners.

The proposal by the Cambridge Business Improvement District (BID) called for visitors staying in “large hotels in the area” to pay a “£2 visitor levy per room per night”.

In the past month, hotels in the Cambridge voted on proposals to establish an “Accommodation Business Improvement District (ABID)”. The proposal was expected to bring in between “£1.5 million and £2.6 million a year”.

This comes after the Cambridge City Council voted in favour of the tax in March. The Council supported the measures unanimously, with Labour councillor Cameron Holloway labelling them a “great initiative” that “would be really positive”.

Guests in AirBnb and self-catering accommodation would not be subject to the tax, which also would not apply to University colleges charging for bed-and-breakfast accommodation, due to their status as educational institutions.

The move was intended to fund Visit Cambridge, the City Council’s official tourism service. Cambridge BID said that it would be used for the “development and management of Greater Cambridge” as a tourist destination.

In order for the ABID to be introduced, both “a majority of voting businesses” and “a majority in terms of their rateable value” would be needed.

However, of the 23 business ratepayers that voted, the majority voted against the proposal. 16 voted ‘No’, six voted ‘Yes’ and one vote was invalid. The businesses that opposed the tax had a combined rateable value of £7,030,750, while the hoteliers that favoured it had a combined rateable value of £2,282,500.

The city and surrounding area attracts more than 7.6 million visitors a year, according to Cambridge Visit. Before the pandemic, about 1.1 million visitors stayed overnight and it had more than six million day trippers, according to a city council report in 2023.