Wales set to introduce “tourism tax” for overnight visitors

A Bill to give local authorities the option to introduce a small visitor levy in their area to re-invest in local tourism, has been introduced by Finance Secretary Mark Drakeford.

The Visitor Accommodation (Register and Levy) Etc. (Wales) Bill proposes that people staying overnight in Wales and enjoying everything the country has to offer will pay a small charge.

The money raised will go towards supporting local tourism activity and infrastructure.

According to the Welsh Government a ‘Tourism Tax’ would provide local communities the opportunity to generate additional revenues.

If all Welsh local authorities choose to introduce a visitor levy, it is estimated it could generate up to £33m a year.

The levy would be set at:

• 75p per person per night for people staying in hostels and on campsite pitches.
• £1.25 per person per night for those staying in all other accommodation types.
• The legislation also includes a requirement to establish and maintain a register of visitor accommodation in Wales, which would – for the first time – provide a register of the broad range of visitor accommodation available across the country.

Local authorities will decide if they want to introduce a levy in their area, based on what is best for their communities. It is estimated the earliest this could happen is 2027 after a local authority has consulted their community.

Visitor levies are used successfully in many parts of the world, including Manchester, Greece, Germany, Netherlands, Spain, Portugal and California.

The funds raised are used to support a healthy visitor economy by protecting and investing in the infrastructure and services guests enjoy.

Finance Secretary Mark Drakeford said: “This Bill is rooted in the principle of fairness. We know tourism makes an important contribution to the Welsh economy and to Welsh life. We want to ensure its long-term sustainability.

“That’s why we believe it is fair visitors contribute towards local facilities, helping to fund infrastructure and services integral to their experience. Visitor levies are common around the world, benefiting local communities, tourists and businesses – and we want the same for Wales.

“Money raised through a levy would be retained by local authorities and re-invested back into their local areas to support local, sustainable tourism. It’s a small contribution that could make a big difference.”

A statutory registration scheme for all accommodation providers is expected to start operating in 2026 to support the collection and administration of a visitor levy.

It will include details about who is operating in the sector, where they are operating, and how they are operating, and help establish a better understanding of the sector and support future policy decisions at a local and national level.

Councillor Andrew Morgan OBE, WLGA Leader, said: “This Bill will give councils the option to introduce a visitor levy on overnight stays. It’s a way to raise extra funds to support local services and improve amenities that benefit both visitors and the community.

“Each council will decide how to apply the levy based on what’s best for their area, recognising that it may be suitable in some parts of Wales but not in others. Councils will carefully consider local circumstances and ensure residents are consulted before any decisions are made.

“We’re glad to have worked closely with the Welsh Government on this and look forward to seeing the draft legislation in the coming weeks, which will mark an important step forward for Wales’ tourism and local economies.”

Response

However the introduction of a Tourism Tax has been met with opposition from the Welsh Conservatives, which have argued that it will “hammer” the tourism industry.

Peter Fox MS, Shadow Minister for Finance and Local Government, said: “This tax is the wrong one for Wales and the wrong one for our tourism industry.

“Not only will it impose huge amounts of red tape on small businesses and add significant costs to family holidays, it will also work against its own aims by driving visitors to using more council-maintained facilities.

“We should be nurturing our tourism sector, not hammering it with new taxes.”

Speaking today the Wales Tourism Alliance said it is “disappointed that a number of the key points on which we felt we had reached an understanding with the Welsh Government have not been adequately reflected in the proposed policy.”

Rowland Rees-Evans, Chair of the Wales Tourism Alliance said: “In particular we feel that the Welsh Government has missed a key opportunity to establish a registration scheme for self-catering accommodation that would have incorporated key health and safety criteria and assured visitors that their accommodation meets basic assurance standards.

“What has been proposed will instead increase the costs for tourism and hospitality businesses, which will be passed on to our visitors, without any perceived “added value”.

“We are also disappointed that there is no clear commitment that the funding raised by the levy will be dedicated to improving the visitor experience in Wales.  We had emphasised the need for tourism and hospitality businesses and representative bodies to be involved with the decision making process on how the levy would be spent, but see no commitment to this.

“This was the Welsh Government’s opportunity to deliver a gold standard in tourism and accommodation – setting Wales apart from the rest of the UK.  Instead it has merely made Wales more expensive without any perceived added-value for our visitors.”