"This is not a tourism tax, it will affect us all" - that is the warning of a group which represents tourism bodies in Wales. The Welsh Tourism Alliance (WTA) has said it is "disappointed" that the Welsh Government is pressing ahead with a policy it has admitted will result in job losses in Wales.
The Welsh Government has said all overnight visitors in Wales will have to pay between 75p to £1.25 a night as a visitor levy, but the change will not take effect until at least 2027. It has been dubbed a "tourism tax" but it goes further than that, the group representing tourism providers has said.
It will apply at one of two rates to anyone staying in Wales overnight, whether in an Airbnb, Vrbo, or short-term let, or hotel, hostel, or campsite. There will be two levels of charge – 75p per person per night for people staying in hostels and on campsite pitches and £1.25 per person per night for those staying in all other accommodation types. There are three exceptions.
Each of Wales' 22 councils will themselves decide whether to introduce such a tax at all. The earliest the charge will come into force is 2027 after a local authority has consulted its community. Councils will subsequently have discretion to change that amount though any such deviation would require ministerial approval and further consultation. For our free daily briefing on the biggest issues facing the nation sign up to the Wales Matters newsletter here.
The new law will also make a register of visitor accommodation in Wales a requirement. It will, for the first time, provide a register of the broad range of visitor accommodation available across the country. The register will be drawn up in 2026.
As part of its official response to the plans, the WTA has said: "The WTA has engaged with the Welsh Government since the Visitor Levy was proposed and we are disappointed that they are pursuing a proposal from which their own Economic Impact Assessment predicts net job losses."
The Welsh Government commissioned a socio-economic assessment about the potential impact of the levy. It looked at three scenarios relating to take up - a "weak, medium and strong behavioural" response. In one, it would see 100 extra jobs created, or, if there was a "strong" take up, losses of 390 full-time equivalent jobs. The intermediary scenario would see 140 full-time equivalent job losses.
That assessment reads: "A downturn in demand could, for example, lead through to employers reducing hours, recruitment, investment plans, salaries or, in the extreme, making redundancies. This may ultimately impact on employees. These results are inevitably uncertain."
The statement from the WTA continues: "The tourism industry in Wales is already reeling from the impact of Covid, the 182 day rule on holiday lets and the cost-of-living crisis. Alongside other businesses our industry has also seen a 40% increase in the living wage since 2020 and faces increased national insurance contributions from this April.
"To place another stressor on an already fragile sector which employs over 20% of the workforce in some parts of Wales is not something we feel would be in the best interests of our country. We also want people to recognise that this is not a tourist tax – it is a visitor levy. It will affect us all in Wales - from children on overnight school trips to people who have to stay in accommodation overnight before early morning NHS admissions."
In their response, º£½ÇÊÓƵHospitality Cymru has demanded Wales be brought into line with other European nations that implement a levy by excluding children. When Mark Drakeford was asked about his thinking behind the setting of fees, he said that having a charge on everyone was in response to feedback from the industry that the law had to be as simple to understand as possible.
