Tourism tax in Wales should not apply to one group of visitors, experts claim

Hospitality chiefs want Wales’ planned tourism tax to give families a break. An organisation representing hotels, pubs, restaurants and indoor leisure said the Welsh Government should not be charging children to visit the country.

UKHospitality Cymru has demanded Wales be brought into line with other European nations that implement a levy. Some countries, like France, give exemptions for most children under 18, others have a variety of age exemptions from 10 years upwards. A few, like Germany and Greece, charge a levy irrespective of age.

The Welsh Government is set to introduce its “visitor levy”, or tourism tax, from 2027 – although individual county councils will decide whether to not to bring in the tax in their area. Visitors would pay £1.25 per night for most accommodation, with a reduced rate of £0.75 for camping pitches and dormitories.

Cardiff’s own impact assessment estimates the planned levy will cost visitors up to £33 million-a-year. David Chapman, executive director of UKHospitality Cymru, said that by making trips more expensive, visitor numbers will be hit, damaging the country’s tourism sector. “We need to see them exempt children from the levy, to ensure families, many of whom may already be on tight budgets, can enjoy holidays in Wales, rather than elsewhere,” he said.

Bangor University estimates that, in 2027, Wales will become the 25th country in Europe, and the 50th worldwide, to implement some type of visitor levy. Scotland has taken similar steps already.

Academics at the university have argued that fears over the potential impact on Welsh tourism have been “overstated”. But writing for The Conversation, economics lecturer Rhys ap Gwilym and tourism expert Linda Osti argued the benefits could be enhanced by introducing “tailored rates”, including concessions for children. Levies could also vary according to length of stay and the time or year, they said. “The bill currently lacks this flexibility,” they wrote.

The pair also suggested the levy could also target day visitors; currently the bill currently applies to overnight stays only. They said: “Day tourists often contribute less to the local economy while still generating environmental and social costs, such as increased traffic. Including them could address the strain placed on resources and infrastructure.” Join the North Wales Live Whatsapp community now

The Welsh Government did consider exemptions for children and teenagers. Initial estimates suggested that if all youngsters under 16 were exempted, it could potentially slash Welsh levy revenues by around a third. Rates for adults may then have to rise to make good the shortfall, according to Cardiff’s impact assessment.

Exemptions could also increase complexity and collection costs, it said. Visitors under 18 are unlikely to be travelling with ID and may not even hold a form of verifiable ID, making it difficult for accommodation providers to ensure compliance. As a result ministers decided on a general tourism tax that was set at “lower rates compared to many similar levies overseas”.

The Welsh tourism tax will be hypothecated, meaning funds will be allocated specifically for tourism-related schemes. Potential uses include transport upgrades and creating amenities that benefit both local people and tourists.

UKHospitality Cymru worries the current plans are too broad to ensure specific ring-fencing of funds to improve tourism. It’s calling for the introduction of a “displacement principle” to ensure that levy proceeds are not used to replace local authority funding shortfalls.

The organisation also wants specific clauses in the legislation that limits how councils spend levy money. All revenues should be ring-fenced for schemes that “demonstrably, tangibly and directly benefit the tourism sector”, it said.

Responding to consultation by the Senedd’s Finance Committee, Mr Chapman said: “Throughout this process, the Welsh Government has made clear to us that it wants this levy to help local authorities and businesses in areas with high tourist numbers. Yet, there is no reference to improving tourism in how the funds can be spent.

“As it stands in this draft legislation, tourism has been sidelined and that is completely unacceptable. We are urging the Welsh Government to rectify this mistake and make clear that levy funds must be used to benefit tourism. Crucially, there must also be a displacement principle included that ensures levy funds are not simply used to fill council coffers and top up day-to-day spending.”

The Welsh Government said the visitor levy was part of attempts to ensure tourism’s long-term sustainability given its importance to the national economy and to Welsh life. To help lower-income families, a lower rate is proposed for groups staying at cheaper accommodation like hostels and campsites.

A spokesperson said: “We have taken a fair approach to application of the levy. The Bill proposes keeping rates low, avoiding the need for more exemptions and nil rates, which would produce significant challenges for both visitors and accommodation providers.

“As set out in the Bill, any money raised would have to be reinvested in the local area to provide and improve services for visitors and residents. The money would be held in a separate account with councils required to publish an annual report to show how any revenue has benefited their local area.” Sign up for the North Wales Live newsletter sent twice daily to your inbox

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