Welsh Tourist Tax is ‘Wrong Tax at the Wrong Time’ Sector Leaders Say

The Wales Tourism Alliance (WTA) is calling on politicians in Wales to engage in closer communication with tourism trade bodies and tourism businesses to find joint solutions to major industry concerns.

Tourism businesses across Wales were also encouraged to respond directly to all consultations on tourism policy changes proposed by the Welsh Government. The urgent call was made by Adrian Greason-Walker, the WTA’s policy advocate and Val Hawkins, chief executive of Mid Wales Tourism, the independent organisation that represents nearly 600 tourism and hospitality businesses and organisations across Powys, Ceredigion and Southern Snowdonia.

The calls follow Welsh Government proposals that will give local authorities powers to introduce a “discretionary” visitor levy, which they say will generate revenue to support investment in the tourism industry in their areas.

The consultation on its proposals ended on December 13.

Introducing a visitor levy is a Welsh Government Programme for Government commitment, the consolation says.

Mr Greason-Walker said: “We have entered a far more economically challenging period than has been seen over the last 20 years,” he said. “The Welsh Government’s own Partial Regulatory Impact Assessment highlights the severe economic conditions that tourism businesses are currently facing.

“As we know from the very recent past, the economic tail of a recession is long and this time the effects of inflation and rising costs will only exacerbate the position.
“We have already asked if the Welsh Government will abandon the proposals if the majority of respondents to the consultation say they don’t want the tourism tax.”
He went on to say that it was also “deeply regrettable” that legitimate self-catering businesses were being caught up in the second homes issue.

“We will now see seismic changes to the way self-catering accommodation is assessed for property taxation in Wales,” he added.

Responding to the consultation UKHospitality Chief Executive, Kate Nicholls said: “We strongly oppose the introduction of a discretionary visitor levy in Wales, particularly at a time when the hospitality industry is facing a troubling combination of soaring costs and staff shortages. The added burden in administrative costs, time and likely impact on visitor numbers and spend, could prove to be the final straw for some businesses that are the heartbeat of many local communities and the lifeblood of our highstreets. Put simply, this is the wrong tax at the wrong time.”

In its submission to the Welsh Government, the leading hospitality trade body highlighted the significant contribution overnight visitors make to local economies in Wales and requested that a detailed, independent Economic Impact Assessment be carried out in order that the full consequences of implementing such a levy be comprehensively explored.

UKHospitality Executive Director for Wales, David Chapman, added: “It is clear to us that any levy will make Wales uncompetitive compared to other international travel destinations, as in European nations where such a levy is in operation, hospitality business are subject to fewer taxes and a lower rate of VAT. Should any visitor levy be introduced in Wales, the money must be ringfenced and operators given full sight and control over where the funds are spent.”

The Welsh Government’s proposed levy differs greatly from the recently announced Manchester Accommodation Business Improvement district (ABID) initiative. This voluntary, collaborative scheme gives operators full sight and control over the use of funds raised from a £1 guest surcharge that will be used solely to reinvest back into the sector.