By Owen Hughes
A tourism tax on holidaymakers in Wales could take a crucial step forward today. Welsh Government wants to give local authorities powers to introduce a Visitor Levy – of up to 拢1.30 a night per person – on overnight stays.
They say it is fair to ask visitors to contribute to the local economy and that the money raised will go towards “local tourism activity and infrastructure”. But the industry has warned about the extra bureaucracy and costs with reports showing it will have some impact on jobs and investment.
The Bill to introduce the visitor levy reaches its third stage in the Senedd today (1 July) and faces a pivotal vote. With Labour and Plaid backing the bill it is likely to progress.
But it will be up to individual local authorities to decide whether to introduce the charge in their county. It is expected that the earliest that it would come in is 2027.
The Bill has already been amended so under-18s will no longer have to pay the levy when staying in hostels or campsites.
The rate for those staying in hostels and on campsite pitches (aged 18 and over) will be 75p per person per night (the lower rate) and the rate for people staying in all other accommodation types will be 拢1.30 per person per night.
Finance Secretary Mark Drakeford said: 鈥淭he visitor levy is a small contribution that could make a big difference if councils choose to introduce it in their local areas. We think it is fair visitors contribute towards local facilities, helping to fund infrastructure and services integral to their experience.
鈥淰isitor levies are common around the world, benefiting local communities, tourists and businesses 鈥 and we want the same for Wales.鈥
A Welsh Government report concluded that for every 1% increase in cost there was on average a near 1% drop in demand. When it came to a tax specifically on tourism accommodation this went to -0.7%.
The sector is worth around 拢3bn to the economy of Wales and operators warn a tax will damage the industry – leading to business failures and lost jobs.
Jim Jones, chief executive of North Wales Tourism, believes based on the study there could a 拢100m hit on the sector – causing circa 2,500 job losses.
He added: “When businesses go bust Wales loses business rates, communities lose employment, the supply chain (local shops, garages, tradespeople) lose business, tax revenues go down. Business contributes 拢1.4bn to the Welsh government annually(in rates), it鈥檚 tempting to ask where has the money gone? It would also mean double taxation on visitors staying overnight who will then pay through business rates and the bed tax.
鈥淚t is the failure to consider how the cost of living crisis impacts on tourist accommodation that defies common sense. Every indicator demonstrates the catastrophic drop in discretionary spending.” Join the North Wales Live WhatsApp community group where you can get the latest stories delivered straight to your phone