IoH Members Reject a Welsh ‘Tourism Tax’

Read and download the IoH Research report here.

Ahead of the Welsh Government’s planned, formal public consultation on draft legislative proposals for a visitor levy this autumn 2022, the IoH has asked its members their views on a potential ‘Tourism Tax’ and its impact on the Welsh Hospitality industry.

In a poll of its 14,000 members in early Summer, the IoH asked 7 questions. All concluded that IoH members would reject the proposal of a visitor levy being introduced if the Welsh Government pushed ahead with its plan.

When asked: ‘Do you feel the Welsh Tourism Tax will have a positive effect on tourism in Wales?’ 65% said no and only 12 % said yes with 23 % saying they felt ok about it. Regarding current taxation, members were asked: ‘Do you feel VAT should remain at 12.5% in Wales if a Welsh Tourist Tax is introduced? 53% agreed.

Feelings ran high and comments flowed, when asked:

‘Do you feel a Welsh Tourism Tax will help support the hospitality industry?’ Members saw this as a highly negative move, toward an already highly pressurised industry with 69% saying no.

Alongside the question: ‘Do you feel the Welsh Tourism Tax will help regenerate the Welsh economy?’ again 63% said no. Further investigation confirmed that 57% of members feel that tourists visiting Wales would seek unregulated accommodation if a Welsh tourist tax were to be introduced.

The planned autumn consultation will provide a platform for a range of views to be considered.

Rebecca Evans MS, Minister for Finance and Local Government argues:
“A levy would enable destinations in Wales to be enjoyed for generations to come. Visitor levies are a common feature in tourist destinations internationally. Without such a levy, local communities face an undue burden to fund local services and provisions on which tourists rely. The critical infrastructure that supports tourism should be supported by all those that rely on it.”

Tourism provides a substantial economic contribution to Wales with tourism-related expenditure reaching more than £5bn annually in 2019. A tourism tax would raise revenue for local authorities enabling them to manage services and infrastructure which makes tourism a success.

The levy will apply to those paying to stay overnight within a local authority area. Opportunities for wider contributions on the cost impact of other types of visitor activities on local infrastructure will be offered as part of the consultation on the levy.

As Robert Richardson FIH concludes:
“At a time when hospitality businesses are struggling with rising inflation, huge hikes in energy bills, and acute labour shortages, the last thing the sector needs is new taxes being imposed on these already struggling businesses”.

The Welsh Government – Welsh Tourism Tax. The Welsh Government – latest update.