‘Tourism Tax’ passed by Senedd amid backlash from Welsh business leaders
‘Tourism Tax’ passed by Senedd amid backlash from Welsh business leaders
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The Welsh Government’s controversial visitor levy, often dubbed the “tourism tax,” has officially been passed by the Senedd by 37 voted to 13, triggering sharp criticism from across the tourism and hospitality sectors.
The new legislation, set to take effect in 2027 at the earliest, will give Welsh local authorities the power to charge a per person, per night fee on overnight stays in visitor accommodation, ranging from £0.75 at campsites and hostels to £1.30 for hotels and self-catering accommodation.
Finance Cabinet Secretary and former First Minister Mark Drakeford defended the policy, calling it a modest, locally-determined contribution that would allow communities to reinvest in tourism infrastructure.
“If councils do introduce it, then a very modest amount of money will be added to the bill of people staying in hotels or other parts of the tourism accommodation sector,” said Drakeford. “That money will be collected and used by local authorities to reinvest in the conditions that make tourism a success here in Wales.”
He stressed that the contribution would be small, “less than the price of a sausage roll”, and pointed to similar models in Scotland, Liverpool and across Europe.
“Change is always difficult,” he acknowledged. “But these levies are common globally. Our scheme will underpin the industry for the future and ensure that it can continue to be a success story.”
However, tourism leaders in Wales are warning that the policy may deliver a severe blow to a sector still recovering from the pandemic and grappling with inflation, staffing shortages and other regulatory changes.
“This is the wrong time to implement a tourism tax,” said Jim Jones, Chief Executive of North Wales Tourism, which represents over 1,300 businesses. “We haven’t had the breathing space to return to pre-COVID levels. This adds unnecessary strain on an already pressured industry.”
Jones cited a recent survey in which 93% of member businesses opposed the levy, fearing it would deter price-conscious families and force operators to absorb the cost or risk losing trade.
“A family of four staying for a week could face an extra £36.40, and that’s on top of 20% VAT, one of the highest in Europe,” he said. “In countries like Spain and Italy where tourism levies exist, VAT is often around 10%. Wales doesn’t have that luxury.”
He also expressed doubts over whether the funds raised would truly benefit tourism infrastructure.
He said: “Councils are already stretched and on the brink of bankruptcy in some cases. Once they have access to the money, how can we be sure it won’t be redirected to other essential services like adult social care or education?”
Echoing those concerns, Ashford Price, Chair of Dan yr Ogof, the National Showcaves Centre for Wales, described the decision as potentially catastrophic for the sector.
“We lost five attractions last year and two more this year, including Oakwood, once the No.1 attraction in Wales,” Price said. “Meanwhile, overnight stays are down nearly 30% over recent years.”
“Those numbers don’t add up. This is a tax that could actually shrink the tourism economy rather than grow it,” Price added.
Price also confirmed that his organisation has cancelled planned investment projects, citing the bleak outlook.
“I wouldn’t advise anyone to put money into Welsh tourism right now. It’s heartbreaking.”
The policy has also drawn criticism from opposition politicians. Welsh Conservative Finance Spokesperson Sam Rowlands MS called the levy “toxic,” arguing it disproportionately affects working families.
“Labour and Plaid’s toxic tourism tax will hit the poorest families the hardest,” Rowlands said. “On the same day that energy, water, and council tax bills rise, Labour Ministers have voted to tax domestic holidays. They are completely out of touch.”
He pledged that the Welsh Conservatives would continue to campaign to “axe the tax” and push for a pro-tourism, pro-business policy approach.
The bill was helped through the it’s final vote due to Plaid Cymru supporting it. The party committed to working with the Welsh Government, as apart of their co-operation agreement, to implement ‘sustainable tourism’. Although that agreement is not longer in place, the party’s Senedd Members voted in favour of the change.
Key Details of the Visitor Levy:
- £0.75 per person per night for campsites and hostels (excludes under-18s)
- £1.30 per person per night for all other accommodation types (includes all ages)
- Applies to stays under 31 days and not used as main residences
- Exemptions include emergency housing and temporary local authority arrangements
- Revenue will be retained and spent by local authorities
- Implementation is optional, with councils able to choose whether and when to adopt the levy
Although passed by the Senedd, the earliest the levy could be introduced is 2027. Local councils will determine whether to adopt the measure, and several, including Wrexham and Pembrokeshire, have already signaled reluctance to implement it.
In the meantime, tourism businesses are calling for a clear economic strategy to grow the sector, not just tax it.
“If you want to sustain public services, you need a thriving economy, not endless new taxes,” Jones said. “We need a plan, not just a price tag.”
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