Wales could become the latest European nation to introduce a tourist tax after proposals for a change in the law were tabled in the Welsh Parliament – but fears are growing the move could massively backfire.
Under the plans, local authorities will be given the power to introduce “visitor levies” should they feel the need to, as has recently been seen in Scotland with the introduction of the The Visitor Levy (Scotland) Act 2024 earlier this year.
The plans have proved controversial, with some fearing they will deter tourists while others claiming the measures don’t go far enough.
Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language, believes the levy will help to ensure “those who benefit from tourism will make a small but important contribution to the maintenance of local areas”.
He added: “Visitor levies play a crucial role in supporting communities and protecting the environment all over the world. Many countries have seen real benefits from the reinvestment of visitor levy funds. We believe such success can be replicated in Wales.”
A decision on whether to introduce the powers is not expected until next year and would not come into effect until 2026 at the earliest.
Under the proposals, accommodation providers would be required to charge guests 75p per person in campsites and hostels, rising to £1.25, applicable to hotel stays and bookings made through rental sites such as Airbnb.
If every Welsh authority introduced the levy, it is estimated that £33 million would be raised to reinvest back into things such as public services and environmental schemes.
Fears that the measures could deter tourists mean that the implementation of any tax would be fraught with balancing the country’s appeal to holidaymakers with the need to raise money to guard against the impact of the industry.
Linda Osti, a senior lecturer in tourism management at Bangor University, believes that the key to avoiding conflict with locals is to find solutions which benefit both people living in areas and the people visiting them.
She told the BBC: “There is no sustainable or regenerative tourism without host communities. We need to create co-operation and make sure that tourism is profiting every member of the community.”
The Welsh tourism industry is on the rise, with statistics from Visit Wales showing that the country welcomed 892,000 international visitors last year, a 30 percent increase from 2022 but still below pre-pandemic levels as it continues its Covid recovery.
The tax plans have been criticised, with Welsh Conservative Tom Giffard claiming that the “anti-tourism agenda is putting the industry and those jobs at risk.”
Giffard said: “I’ve said it a million times, one in seven Welsh people are employed by the tourism and hospitality sector and a tax on tourism is a tax on jobs. We have seen in Venice that a tourism tax was introduced there to actively reduce the number of tourists and I hope we are not going to be following suit.”
The Wales Tourism Alliance, which represents more than 6,000 firms, claimed the Welsh Government has ignored “key points” the organisation had put forward during the consultation process for tax.
It said: “In particular we feel that the Welsh Government has missed a key opportunity to establish a registration scheme for self-catering accommodation, which would have incorporated key health and safety criteria and assured visitors that their accommodation meets basic assurance standards.
“What has been proposed will instead increase the costs for tourism and hospitality businesses, which will be passed on to our visitors, without any perceived ‘added value’. We are also disappointed that there is no clear commitment that the funding raised by the levy will be dedicated to improving the visitor experience in Wales.”
