Rebecca Evans MS, Minister for Finance and Local Government
Tourism provides a substantial economic contribution to Wales with tourism-related expenditure reaching more than £5bn annually in 2019.
The pandemic has had an unprecedented impact on the tourism industry and across society. We have seen there is strong appetite in the UK to visit Wales and explore our unique offering, beautiful landscapes and rich heritage. We hope visitors will continue to enjoy all we have to offer – now and in the future.
As outlined in our Programme for Government, we are committed to consulting on and introducing legislative powers to enable local authorities to raise a levy on tourism. This work is being carried out in collaboration with Plaid Cymru, as part of the Co-operation Agreement. This statement sets out the purpose and scope of the proposed levy powers.
The purpose of this levy is to raise revenue for local authorities, to enable them to manage and invest in the services and infrastructure which make tourism a success.
Visitor levies are a common feature in tourist destinations internationally. They are an opportunity for visitors to make an investment in local infrastructure and services, which in turn make tourism a success. Without such a levy, local communities face an undue burden to fund local services and provisions on which tourists rely. From keeping the beaches and pavements clean, through to maintaining local parks, toilets and footpaths – the critical infrastructure that supports tourism should be supported by all those that rely on it.
The introduction and subsequent use of such a levy would enable destinations in Wales to be enjoyed for generations to come and encourage a more sustainable approach to tourism.
The levy would be proportionate by design, and powers to raise the levy would be discretionary for local authorities. This would enable decisions to be taken locally, according to the needs of our communities. The levy will apply to those paying to stay overnight within a local authority area. Opportunities for wider contributions on the cost impact of other types of visitor activities on local infrastructure will be offered as part of the consultation on the levy.
I am aware that there are some concerns around the potential economic impacts. Globally, tourism levies are routinely used, and there is little evidence to suggest they have a negative economic impact. We are undertaking our own research and analysis to ensure that the design is suitable for our local communities, authorities and businesses in Wales. We are committed to the co-creation of policy through engagement with our partners and those impacted by a visitor levy.
Formal consultation on draft legislative proposals for a tourism levy will launch in autumn 2022 and will provide a platform for a range of views to be considered, with legislation to follow in due course.