Visitors to Wales are being warned they could be charged a tourist tax when staying overnight.
The Welsh Government is introducing legislation that will give local councils the power to apply a visitor levy to accommodation bills.
It means that anyone staying in a hotel, Airbnb or self-catering property in Wales will have to pay £1.25 per person per night in tax, while those staying in a hostel or on a campsite would be charged 75p each per night.
It’s estimated that the tourism levy could generate up to £33 million per year if all local authorities in Wales introduce it, with the funds to be used to spend on local tourism activity and infrastructure.
A statutory registration scheme for all accommodation providers is expected to start operating next year to support the collection and administration of a visitor levy. The Bill will need to get the Senedd’s approval and councils may only introduce it by 2027.
Councillor Andrew Morgan, leader of the Welsh Local Government Association, said: “This Bill will give councils the option to introduce a visitor levy on overnight stays. It’s a way to raise extra funds to support local services and improve amenities that benefit both visitors and the community.
“Each council will decide how to apply the levy based on what’s best for their area, recognising that it may be suitable in some parts of Wales but not in others. Councils will carefully consider local circumstances and ensure residents are consulted before any decisions are made.”
While ministers hope the money raised by the tax will help to fund improvements to local amenities, accommodation providers have warned the charge could deter visitors and be “detrimental” to business.
William McNamara, chief executive of Bluestone National Park Resort in Pembrokeshire, said: “While we have slightly more clarity on the proposed visitor levy, including the £1.25 overnight charge, there remain concerns about its potential impact on the tourism sector.
“Wales risks becoming less attractive to visitors, especially families, who may view this as an additional cost in an already competitive UK market, particularly as this levy is not being introduced in England. The flexibility for councils to raise charges in the future also adds an element of uncertainty that must be carefully managed.”
In a consultation in 2022, one accommodation provider told ministers: “To impose this tax now or in the near future will be detrimental to our business [and the] self catering industry.”
The plans have also been met with criticism from the opposition government, with Peter Fox, Welsh Conservative finance spokesman, warning such a tourism tax would cost jobs and not attract more visitors to Wales.
He warned: “We’ve been absolutely clear from the start that this policy is the wrong one for Wales. A tourism tax will risk jobs at a time when businesses are being clobbered by Labour. It will impose red tape and it will work against its own aims by encouraging visitors to use more council-maintained attractions and services. Our tourism industry should be nurtured by the Welsh Government, not hamstrung by new taxes.”
A ‘tourist tax’ is already in force in Manchester where anyone who stays in a city centre hotel or holiday apartment is required to pay £1 per night, per room.
The tax came into effect in April last year to help fund the Manchester Accommodation Business Improvement District (ABID), which is designed to “improve the visitor experience” and “support future growth of the visitor economy” over the next five years.
The fee mirrors similar charges in major tourist destinations around the world including Venice, Madrid, Barcelona, Greece, Germany, the Netherlands, Rome, Portugal and California.
Elsewhere in the UK, the City of Edinburgh Council approved plans to introduce a tourist tax in Edinburgh in November 2022. The Transient Visitor Levy will charge guests five percent levy per room night, capped at seven consecutive days, starting in 2026.
Oxford, Bath and Hull have also considered a similar move in recent years, but opted against it.
