Tourism tax will harm Mid Wales beyond repair, Brecon and Radnorshire Senedd Member says

The Visitor Accommodation (Register and Levy) (Wales) Bill aims to impose a levy of at least £1.25 per person per night in hotels, not inclusive of VAT and not inclusive of an effectively unlimited premium that can be requested by councils levying the charge. 

This will affect a wide range of accommodation providers, including hotels and self-catering establishments. It will also hit the many educational outdoor activity accommodation sites in the constituency.

Members debated and voted on the general principles of the bill this week. 

It passed with support from Labour, Plaid Cymru and the Liberal Democrat, with only the Welsh Conservatives opposed. 

James is concerned how the Lib Dem / Labour run Powys County Council has not yet put forward a clear plan on how the revenue from the levy will be used, raising fears about transparency and the potential for funds to be misallocated, and is doubtful about whether the revenue will actually be reinvested into the tourism sector as promised by the Welsh Government.

James highlighted that the tourism industry in Wales, particularly in Powys, is still recovering from the challenges brought on by the Covid-19 pandemic, and warned that the introduction of this new tax could place a heavy burden on businesses that are already struggling with rising operational costs and other Welsh Labour Government policies, such as the 182-day occupancy rule for self-catering properties.

James is also worried the new tax will disproportionately affect Welsh tourists seeking to holiday in their own country, as 90% of visitors to Wales are from within the UK. 

Under the proposals, Welsh residents would be essentially taxed to stay overnight in their own country, at a time when tourism numbers are still recovering from the pandemic. 

He expressed concern that this could deter Welsh families from visiting other parts of the country, thus harming local tourism sector across Mid Wales.

James said: “The Welsh Government bowed to pressure and have u-turned on their plans to tax educational trips, but by pushing ahead with the tax and increasing the charge by 5p on the amounts for everyone else, it will undoubtedly deter visitors, hurt businesses and put their future viability at risk.

“Labour claims this tax will support local services, but there is no clarity on how the Lib Dem / Labour run Powys County Council will use the funds raised from the proposed tourism levy. Local businesses need clarity and certainty that the revenue will be reinvested directly into supporting the tourism industry. Without these assurances, this tax will create more harm than good.

“The Welsh Labour Government is asking Welsh people to pay a tax to stay in their own country. This is an insult, and an unfair burden that could discourage families, local people, and others from further afield from coming to Wales.

“The Welsh Government must ditch these plans for an unfair tourism tax and create policies that work in the interests of our tourism businesses, not against them. We need to be supporting the tourism sector, not imposing additional barriers at a time when the industry is trying to recover after a tough few years.”