The impending tourist tax for visitors staying overnight in Wales could see dire effects, says the Government’s own report.
The Welsh Government is said to be introducing this tourist tax legislation which will give local councils power to impose a visitor levy for accommodation bills.
Recently the Government introduced this bill at the Senedd but according to a report for the Welsh Government, many jobs could be lost with its introduction.
The Welsh Government said the money raised from the tourist tax will help improve a number of services and facilities further boosting Wales as a tourism hotspot and reduce the burden on local taxpayers.
Despite the new legislation having a number of benefits for Wales, roughly 700 jobs and more could be lost in the Welsh holiday sector, in a devastating blow to the bombshell new plans.
Fears among locals is that this tourist tax will cripple the industry despite these levies being commonplace in many other spots.
Tourism industries in Wales accounted for around 11.8% of employment in 2022 contributing to a whopping £3.8 billion.
However, according to a new report by Calvin Jones of Cardiff Business School and Welsh Government lays bare how this could potentially impact the country’s economy.
The report only hypothesises the impact, though, as it is still not fully known how many councils will introduce this tax and how holidaymakers will respond.
In the report it assesses the impact on the Welsh visitor economy using optimistic, neutral and pessimistic scenarios.
The worst case scenario could see the economic output losing around 730 jobs in the private sector.
The neutral scenario estimates that around 485 workers could lose the jobs by the visitor levy
The optimistic scenario would see job losses of around 250.
The report said: “New public spending would serve to offset – in part – the losses to the tourism economy following reductions in visitor spending.
“A Levy would effectively comprise a direct, short-term transfer of revenue from the private to the public sector, albeit with the expectation that Levy revenue would benefit Welsh businesses in the longer term as the income was used to support a more resilient, sustainable, and higher value set of visitor activities.”
The tourist levy could see an extra £33 million a year for Welsh councils based on the assumption all authorities implement it with a further £34 million boosting economic output with 340 extra jobs.
“If levy costs are borne wholly by the accommodation sector, with the Levy absorbed in existing price structures, net economic losses are larger at around £40m of GVA per annum,” added the report.
