Outrage over Wales tourism tax plans as major tourism group urges leaders to 'consider the consequences'

Mid Wales Tourism (MWT Cymru), which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Meirionnydd, is calling for greater scrutiny of the Welsh Government’s proposed visitor levy.

The organisation has warned that the policy could place disproportionate strain on rural economies, while delivering limited practical benefit on the ground.

The levy, which would charge overnight visitors up to £1.30 per night, has been described as a way for tourists to contribute more to local services.

But, MWT Cymru is urging decision-makers and communities alike to consider the wider consequences, particularly for regions where tourism underpins jobs, town centres and public life.

“With three in ten overnight stays in Wales made by Welsh residents, this isn’t just about visitors from elsewhere; it’s also a charge on families choosing to holiday at home,” said Zoe Hawkins, chief executive of MWT Cymru.

“For a family of five staying with a VAT-registered business, this could mean an extra £55 in tax. That may not sound like much on paper, but every added cost influences choices.”

MWT said that while the levy is intended to boost local investment, the economic modelling tells a more complex story.

The Welsh Government’s own research estimates a potential two per cent to 10 per cent drop in overnight stays.

A two per cent decline alone could mean a £68 million loss to rural economies annually across Powys, Ceredigion and Gwynedd, hitting independent businesses hardest, says MWT Cymru.

Research carried out by the Welsh Government has stated that should all 22 local authorities adopt the levy, then this would generate £33 million across Wales - but there are questions over whether the money will materialise in reality.

It would be optional for authorities to adopt the levy, if the Welsh Government approves the legislation.

“Pembrokeshire, one of Wales’ most visited counties, has already chosen not to implement the levy at this time, recognising the potential economic risks,” said Zoe. “This decision not only shows leadership in protecting rural jobs but also reshapes the financial assumptions behind the policy. If major visitor destinations opt out, the return will be far lower than originally suggested but the cost and complexity remain.”

MWT has raised concerns about readiness for the change. A statutory register of tourism businesses -  essential for applying the levy fairly - has no confirmed timeline or funding.

Estimates range from 16,000 to 55,000 businesses across Wales, underscoring the lack of clarity and undermining the confidence in the financial modelling being presented.

“As an industry, we have always supported the introduction of a comprehensive register of all tourism businesses and this must come first,” said Zoe. “You can’t fairly apply a tax if you don’t even know who it applies to.”

MWT Cymru is calling on local authorities and Senedd members in Powys, Ceredigion and Gwynedd to follow Pembrokeshire’s lead.

It says town centres are under pressure, attractions have closed and job security is fragile already.

“Everyone wants to see sustainable investment, our tourism businesses included,” said Zoe. “But it has to be based on the realities of each region. Bala isn’t Barcelona, Machynlleth isn’t Manchester and we are not hosting Taylor Swift at Aberystwyth Arts Centre!

“Rural Wales works differently. We don’t have the safety net of major events or business tourism. Even a small drop in visitors can have immediate, far-reaching impacts on jobs, high streets and communities.

“This isn’t about opposing for opposition’s sake, it’s about ensuring policies work for all of Wales. In uncertain times, even well-meaning policies can have unintended consequences. For rural Wales, those consequences can be deeper and harder to reverse.”