Mancunians could be taxed for visiting Wales, reports have said.
This autumn, the Welsh Government will be launching a tourist tax consultation and if implemented, councils can choose whether to introduce a levy for visitors. Ministers said a tourism tax would help councils pay for services and infrastructure in tourist hotspots.
The concept was agreed by Cardiff through its cooperation agreement with Plaid Cymru. But plans to introduce the ‘tourism tax’ will make the country’s holiday sector less competitive, the owner of a major Welsh attraction has warned.
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The news comes just as Britain grapples with soaring costs of living. Ashford Price, membership secretary of the Welsh Association of Visitor Attractions, said tourism businesses are worried and some are withholding investment plans until more is known, NorthWalesLive reports.
Given that businesses now face rising costs from energy, fuel, food and insurance, Mr Price, owner of the National Showcaves Center for Wales, said the idea was “unfathomable” to the many tourism businesses which were hit with losses from successive Covid lockdowns.
He added: “Even more critical for Welsh tourism is that British people are forecast to see the biggest drop in their living standards since the 1950s, with £1,200 of additional household costs, and a real income drop of over 3%. Thus, for some families their future Welsh holidays, are already in doubt.
“All the other returned areas have looked at the idea of a tourism tax. The most recent was Scotland. In the end, they all have abandoned the idea owing to the potential damage to their tourism industries.
“If this Welsh tourism tax does come about, how many of our potential customers will simply vote with their feet and go to Devon, Ireland, or Scotland rather than pay yet another tax at a time when they are trying to cope with a personal cost of living crises?”
Tourism is Wales’ second largest industry, with visitors spending on average £8 million-a-day. A quarter of all VAT-registered businesses are in the visitor economy, said Mr Price.
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“Wales has much to lose if this tax is implemented. Surely we need to encourage tourists to come to Wales, not tax them for coming!” he said.
“The Sun, Express and Mail newspapers are already having a field day, dubbing the proposed Welsh tourism tax a “tax on the English wanting to visit Wales”. From the many English contacts I have made in tourism over the years, I gather there is now a growing feeling by some in England that the Welsh Government is anti-English, and also anti-tourism.
“In many Welsh regions, 80% of their visitors come from England. Can Wales really afford to lose this market?”
The Welsh Government says visitor levies are commonplace across the world, with revenues used to benefit local communities, tourists and businesses. A spokesperson added: “We will take all views on board as part of the consultation process this autumn. The careful process of developing proposals for a levy, translating them into legislation, and then into delivery and implementation spans years, and will be subject to approval by the Senedd.”
EU destinations such as Spain have local tourism taxes and the Valencia region recently became the latest to levy a charge. Visitors in Benidorm, the Costa Blanca and other popular spots will now pay up to two euros per night in hotels, campsites and hostels, potentially adding an extra £94 for a family of four on a two-week holiday.
Additionally, cruise ship passengers will be subject to a levy, whether or not they are staying overnight. The aim is to help resorts recover from the pandemic.
However Mr Price said comparisons with what’s happening in Wales was “misleading” as VAT rates for tourist businesses in many EU destinations is 10%. In Britain, the rate is 20%.
He said the structure of Wales’ tourism sector also differs from many of its EU rivals. Daytrippers form the bulk of their customers, yet they contribute relatively little to the tourism economy.
“France has 433 million tourists staying overnight, and Spain 471 million staying overnight,” he said. “Wales has just 34 million overnight stays.
“Tourists who stay overnight in Wales spend on average about £190 per day, whereas the day visitors only spend about £30. Therefore, surely we should be encouraging overnight stays, not putting extra tax on tourists supporting the Welsh economy by staying overnight?”
Critics of a tourism tax worry that councils will use the extra income received to decrease other spending on tourism. Last month Welsh Conservatives leader Andrew RT Davies attacked Adam Price over what he called the Plaid Cymru leader “remarkable admission” that a tourism tax could be used to fund universal free school meals.
First Minister Mark Drakeford has said a tourism tax can benefit the industry by increasing investment in visitor facilities such as toilets and car parks. It will also help relieve the burden on local taxpayers who currently fund these facilities through council taxes, he said.
But Mr Price believes a tourist tax will penalize local communities if jobs are lost, and affect the plans of people wanting to holiday in their own country. “I don’t think Welsh people realize this tax will also hit them hard in the pocket,” he said.
“As an example, hen and Stag parties staying overnight in Tenby will have to pay this tax, as will any Welsh person staying in a hotel or caravan park. Youngsters in tents will have to pay this tax. In fact, this tax will probably hit the lower incomes of many Welsh people far more than the tourists staying in £350 per night accommodation, who will not worry about an additional £15 on their bills.”
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