Wales' tourism tax plans given go-ahead

A new law allowing councils to tax visitors staying overnight in Wales has been agreed by the Senedd in a vote.

People staying in hotels could have £1.30 per night added to the cost of their stay if the plans go ahead.

Officials hope the tax will raise as much as £33m a year to support and improve tourist destinations if all authorities took it up, but businesses worry it might put visitors off.

The Welsh Conservatives vowed to scrap the tax if the party wins the 2026 Senedd election.

Plaid Cymru support for the legislation meant the Welsh government had the numbers it needs to get the law through the Senedd.

Councils need to approve the measure before it becomes a reality - so far Cardiff, Anglesey and Gwynedd have shown interest. Some have ruled it out.

Under the plans, those staying in hostels and campsites would pay 75p per person per night, while people staying in all other accommodation would pay the higher rate.

The charges are subject to VAT, while children under 18 will be exempt at hostels and campsites.

Senedd members debated the legislation for a final time on Tuesday afternoon, agreeing it should become law with 37 votes for and 13 against.

Finance Secretary Mark Drakeford said it was the first local tax for more than 500 years to have been designed in Wales.

"We believe it is reasonable for visitors to contribute towards infrastructure and services integral to their experience, as they do in so many other parts of the world," he said.

The Welsh Conservatives vowed to scrap the plans before they come into force, should they form a government after the next Senedd election.

Sam Rowlands said the levy would impact jobs and the economy by the Welsh government's "own admission".

"We believe it is bad for Wales and bad for the Welsh tourism sector which forms such an important part of the Welsh economy."

Jenny Rathbone, Cardiff Central Member of the Senedd (MS), accused the Conservatives of being "completely out of touch".

"Thousands of people have visited Cardiff in the last few days and weeks," she said.

"How do you expect the poor people of Adamsdown to have to cover all the other costs like the litter that is inevitably created?"

Plaid Cymru's Luke Fletcher expressed support, saying: "There is a genuine opportunity here for us to create a sustainable tourism sector that works with both our communities and the businesses that operate within those communities."

Bethan Evans says she supports the tax "in theory" but knows there will be some resistance from people

Bethan Evans, of family-run business Dolgamedd caravan park in Dolgellau, Gwynedd, said she welcomed the plans.

"In theory, I'm all for it. You can tell when the tourists come – roads are full, toilets are full, there's more rubbish. Somebody should pay for that, it just makes sense," she said.

"I'm hoping the Senedd will provide everybody with clear instructions. I think it'll be easier than it sounds."

Rachel Freeman, who was holidaying in north Wales from across the border in England, said she felt tourists already "contribute an awful lot to the country that we love and we visit" and the planned tax was "not entirely fair".

"I think we show enough respect and there's that reciprocal exchange by investing already by coming to the country and paying into the local economy and into local business," she said.

Rachel Freeman says the tax is "not entirely fair" on holidaymakers like her

Delma James, a tourist interviewed in Dolgellau, said she would be happy to pay, "no problem whatsoever".

"It pays for the services in the area, the toilets, other amenities."

She said she supported the taxation, even of Welsh people like herself on holiday in other areas of the country.

But Ian Williamson felt it was a "deterrent" to tourists and was "not welcome".

Sammi Rogers of Aran Hufen Ia ice cream shop, Bala, said she believed the tax could be detrimental to small businesses.

"I really feel like if someone is deciding between a holiday in Shropshire or the Lake District and Wales and it's going to be that little bit extra, it could push them to just go to a different area and not come to Wales."

Sammi Rogers fears tourism tax could "push" people away from holidaying in Wales

Plans for a tourism levy were promised in Labour's 2021 Senedd election manifesto, and in the party's now-defunct co-operation deal with Plaid Cymru.

They were drawn up following growing concerns about the impact of tourism in some Welsh communities.

It would be up to individual councils to decide whether to levy the charges, which would be introduced in 2027 at the earliest.

Local authorities could also decide after a year to increase the charges, in agreement with the Welsh government.

Cardiff council's Labour leader Huw Thomas has said he wants to introduce the policy in the capital.

He told Radio Wales Breakfast he thinks the city would raise around £3.5m-£4m a year.

Mr Thomas said the levy would allow the city to "recoup some of the costs" of holding events like the recent Oasis shows.

Anglesey has also backed the idea in principle, according to WalesOnline, while Gwynedd has welcomed the legislation.

Some councils have said they have no plans to introduce the levy, including Vale of Glamorgan, Rhondda Cynon Taf, Newport, and Wrexham.

The latter council's leader Mark Pritchard said: "What everyone forgets is that millions of pounds flows into Wales... don't put obstacles in people's way."

Under the legislation, councils have to spend the cash on managing and improving tourist destinations.

This could be things such as toilets, promoting the Welsh language, footpaths, beaches and visitor centres, but what the cash ends up funding will ultimately be up to councils to decide.

Accommodation providers will also be required to join a register under the law.

An impact assessment said the number of visitors could fall as a result of the plans.

It suggests that, in the most optimistic case, the levy could lead to 100 new jobs overall, but in the worst could see 390 fewer jobs.

Estimates for how much it will benefit or hit the economy range from a boost of £10.8m, to a reduction of £7.3m, when public spending is taken into account.

Without adding on how much might be spent by the public sector as a result of the levy, estimates range from a £9.1m hit to the economy, to a £26.8m hit.

Among those concerned with the plans have been the Welsh Tourism Alliance, which said the way the bill had been drafted meant councils did not need to focus on tourism when they decide how to spend the cash.

The Mid Wales Tourism group's Suzy Davies said the levy had "long ceased to be a tourism tax" because it would apply to "staying in visitor accommodation for any reason".

Reform UK, which is hoping to win seats in the Senedd for the first time next May, said the tax would "hurt local businesses and cost rural jobs".

Additional reporting by Mari Grug