A visitor levy in Wales could “transform” the country’s tourism sector but only if best practice guidelines are followed, academics have warned. Revenues should be used both to support tourism businesses and the wellbeing of local communities, according to a Bangor University report.
The Welsh Government estimates the levy – dubbed a tourism tax – could raise £33m annually if all 22 local authories in Wales decide to adopt it. Bangor University warned the money must be ring-fenced and not diverted to other budgets if the policy is to succeed.
Spending of collected levies should be on tourism-specific “public goods” such as tourism infrastructure and destination marketing, said a university report. However it could also be used to mitigate of “external costs relating to tourism”, such as protecting honeypot sites from over-tourism and affordable housing in areas where locals have been pushed out.
Welsh accommodation providers fear another tax on top of high VAT rates and rising costs will them less competitive against UK and foreign destinations. However report co-author Dr Rhys ap Gwilym, senior economics lecturer at Bangor Business School, believes the levy could also bring benefits – not just to the holiday sector but also to local communities. He said: “Tourism is an important part of the Welsh economy.
“But at present it is characterised by low wage, seasonal jobs and it doesn’t always bring great benefits to communities. The visitor levy has the potential to transform the sector in Wales, so long as councils follow the international best practice that we have presented in our report.”
The study was published on the day the Welsh Government introduced a visitor levy Bill to the Senedd. This proposes two levels of charge depending on the accommodation. For those staying in hostels and on campsite pitches, it will be 75p per person per night. For all other accommodation types, the charge will be £1.25 per person per night.
Bangor’s report, funded by Cardiff, makes eight recommendations. These were compiled after visitor levies were analysed in other parts of the world. From a long-list of 61 international destinations, seven were chosen for in-depth scrutiny, their visitor economies considered more closely matched to that of Wales. They were:
- Balearic Islands, Spain
- Iceland
- Mareo and Bruneck-Brunico, South Tyrol, Italy
- Catalonia, Spain
- Jackson Hole, Wyoming, USA
- Gunnison County, Colorado, USA
- Orange County, Florida, USA
Largely, these destinations used visitor levy spending in different ways. In the US, Jackson Hole refined a public bus system catering for residents, commuters and visitors. This included free town shuttles equipped with bike racks for cyclists to encourage sustainable transport.
In Orange County, home to Walt Disney World Resort, SeaWorld, and Universal Studios, a convention centre was built which, following subsequent expansion, is now the third largest in the USA. Join the North Wales Live WhatsApp community group where you can get the latest stories delivered straight to your phone
Catalonia used use levy revenues to launch a 2,000km “Grand Tour” of the region connecting 72 experiences in the hope of dispersing tourism benefits. One project to benefit in Iceland was a scheme to improve accessibility and conservation at the country’s spectacular Goðafoss waterfall.
(Image: 4300streetcar/Wiki)
Two destinations earmarked revenues to address shortages in affordable housing. On the Balearic Islands, 19 social homes were built in Palma de Majorca. And in the US town of Crested Butte, Gunnison County, a 7.5% tax on holiday rentals was earmarked exclusively for supporting affordable housing initiatives for local workers and residents. Here, extra funds were diverted from tourism marketing budgets towards social housing and childcare.
Bangor University’s Linda Osti, a lecturer in tourism management who co-authored the report, said Italy’s South Tyrol region took a different approach. Here, Destination Management Organizations (DMOs) were established to facilitate its visitor levy.
She said: “DMOs at the local level use levy revenues in the best interests of both the tourism sector and the wellbeing of local communities. We’ve seen examples of those funds supporting affordable housing, public transport and even sponsoring local radio stations.
“Such models could greatly benefit Wales if implemented thoughtfully.” Sign up for the North Wales Live newsletter sent twice daily to your inbox
Eight best-practice recommendations
- Visitor levy revenues should be hypothecated to invest in tourism-specific public goods such as tourism infrastructure and destination marketing, and to finance the mitigation of external costs relating to tourism.
- External tourism costs should include a wide range of spending categories to enhance the social, cultural and environmental sustainability of host communities.
- To disseminate funds, direct allocation by government should be avoided. Instead it should be through grants or via “designated bodies” – or a hybrid of the two. In either case, organisations should be established to manage the disbursement of visitor levy revenues.
- These organisations should represent a wide range of interested parties, including government representatives down to community council level. Tourism businesses, trades unions, cultural groups and environmental groups should also be represented.
- When allocating visitor levy revenues, “prominence should be given to local considerations”.
- Funded projects and activities should have clear objectives, with post-implementation assessments carried out to see if objectives have been met.
- Allocating revenues should be “as transparent as possible” to facilitate accountability. Decision-making meetings should be publicly accessible and details should be published widely.
- Ongoing monitoring and evaluation is needed to enable best practice to evolve.
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