Visitor Accommodation (Register and Levy) Etc. (Wales) Bill

The Visitor Accommodation (Register and Levy) Etc. (Wales) Bill gives local authorities the choice to introduce a levy on overnight stays in visitor accommodation.

Local authorities will decide whether to introduce a visitor levy. They must consult with their communities before doing so.

It will be a per person per night charge. It will apply to overnight stays in visitor accommodation in Wales where a local authority has decided to introduce a visitor levy in their area. The levy would apply to all visitors regardless of where they have travelled from.

The Bill also establishes a register of visitor accommodation providers operating in Wales. The register will include the type of visitor accommodation and location of the premises they operate across Wales. All visitor accommodation providers will be required to register. This is regardless of whether the local authority area they are operating in has chosen to introduce a visitor levy.

Our ambition is to grow tourism by supporting local communities in a way that is sustainable.

The Bill gives local authorities the ability to generate new money. This money can be invested into local services and infrastructure to support tourism in their area. Visitor levies are based on the principle of fairness. They aim to share the costs of tourism between residents and visitors more evenly.

Where a visitor levy has been introduced, the levy rate is a per person per night charge on overnight accommodation, set as:

• £0.75 per person per night for those staying at campsites (pitches) and hostels.
• £1.25 per person per night for those staying in all other visitor accommodation types.

The rate will be set nationally to ensure consistency.

Providers will be responsible for paying the levy. It is likely they will pass this charge on to visitors as an ‘indirect tax’. It will be collected and managed by the Welsh Revenue Authority (WRA).

The levy will not be payable for stays in visitor accommodation where the:

• Stay is longer than 31 days
• Stay is at an individual’s sole or main residence
• The stay is for emergency or temporary housing arranged by the local authority

If a stay is due to an emergency situation, visitors may be able to seek a refund from the Welsh Revenue Authority. For instance, if a visitor's home is uninhabitable due to fire or flood.

Disabled people who pay additional levy costs when accompanied by a carer will also be able to claim a refund.

If all local authorities in Wales introduced a levy, it could generate up to £33 million a year across Wales.

Money raised from the levy can help communities respond to the costs associated with tourism. It can also support the Welsh language and help tourism grow. It will help improve things like toilets, footpaths, beaches, and support visitor centres. This will benefit both visitors and local residents.

When developing legislation, we need to set out the impact a levy is likely to have. All impact assessments have been published here and an explanatory memorandum and regulatory impact assessment for the legislation is published on Senedd pages.

Provided alongside impact assessments and other research, is a compendium of data sources on visitor and accommodation numbers for different types of establishments (Serviced, Self-Catering, Camping/Caravan, Hostels). These figures provide some useful context in which to start framing insights into potential revenue generation and implementation costs.

An overview of the tax systems facing the visitor economy in selected countries

In our engagement with the tourism industry, businesses have highlighted concerns about the tax burden facing the industry. In particular, concerns have been raised around VAT. VAT rates are set by the UK government. The UK government set the VAT rate back to 20% for the hospitality sector as of 1st April 2022. This is an uplift from the 12.5% rate that had been in place for the sector since October 2021.

We commissioned research to understand the different tax systems facing the visitor economy in general, and the accommodation sector in particular, in countries with similar economic and tourism characteristics to Wales. This will help us to understand the relative tax burdens facing the tourism industry in other countries, and how the proposed levy would interact with these.

Research by Bangor University was commissioned in summer 2023 to review international evidence on the non-economic impacts of a visitor levy. This was part of the development of visitor levy legislation, a Programme for Government commitment.

Research on elasticities relevant to a visitor levy in Wales

Engagement has also highlighted concerns about how a levy will impact visitor and supplier behaviour. In response to this, we commissioned a review of the existing research on this topic. The research is examining the evidence on the responsiveness of visitor demand and suppliers to changes in the price of tourism (‘the price elasticities’) and changes in visitor demand to changes in visitors’ income (‘the income elasticity of demand’).

Preliminary findings have been used to inform our understanding of the potential impact of the levy.

Analysis of the demographics of the accommodation sector in Wales

We also commissioned the Office for National Statistics to produce an analysis of the demography of accommodation sector in Wales. The Welsh Government will use the data to inform understanding of the potential impact of the levy, and to support any evaluation activity taken forward.

Consumer research

The research was designed to obtain the views of Welsh residents and UK domestic holiday consumers on the potential discretionary visitor levy. It has explored opinions on whether visitors should contribute via a levy, are willing to pay a levy and if they would change their behaviour if a levy was introduced.

More than 2,500 respondents completed the survey; 1,005 lived in Wales. The results reflected broad support for the principle of a visitor levy. The research found that respondents to the survey were more positive than negative when introduced to the concept of a visitor levy in a place where they go on holiday or in their area. 45% were positive, and 25% were negative and positivity increased amongst people with lots of tourism in their area.

Those surveyed broadly supported the principle of a visitor levy. A majority (58%) of respondents agree that tourists should contribute towards the costs of maintaining and investing in the destinations they stay in, rising amongst people with lots of tourism in their area – in Wales (66%) and the UK (72%) with 13% disagreeing.

Visitor levy research: views of consumers and residents

Consultation

Details of the outcome of the consultation which ended on 13 December 2022 can be found here.The consultation explored the proposed design of the visitor levy. In December 2022, we commissioned an independent analysis of responses to the consultation in December 2022. This work was undertaken by Alma Economics.

You can follow the Bill’s progress through the Senedd.

Read the full text of the Bill and explanatory memorandum.

A final vote on the Visitor Accommodation (Register and Levy) Etc. (Wales) Bill will likely take place in summer 2025.

If the Bill is passed by the Senedd, it will be for local authorities to consult with their local populations before deciding whether to introduce a visitor levy. The earliest a visitor levy could be introduced is 2027.

We intend for registration of all visitor accommodation providers in Wales to start in 2026. Support will be available to accommodation providers throughout the registration process.

The register is the first step towards a statutory licensing scheme for visitor accommodation in Wales.

Further legislation will be introduced in due course.