Tourism tax concerns as cost of living hits bookings

TOURISM bosses say summer and autumn bookings are slumping and fear a tourism tax will hit them hard at the worst possible time. They say cost of living worries and rising prices are affecting demand.

A new report from Visit Wales showed cost-of-living worries are playing a crucial role in trip choices. Two-thirds (67%) of domestic holidaymakers believe they have been “hit hard” by rising costs, or are “OK but have to be careful”. Only a third believe they will not be negatively impacted.

Fuels costs were cited as the number one reason for not visiting Wales in the next 12 months. Rising leisure costs and personal finances were also blamed as one in four people plan to cut back.

The survey, carried out in June, found that “great value for money” was a key reason for visiting Wales – and that one of the key draws was cheaper accommodation. According to the Welsh Conservatives, this competitive edge risks being blunted by plans for a tourism tax.

Tom Giffard, shadow minister for culture, tourism and sport, said the proposals come “at the worst possible time” for the country’s visitor economy. “It is encouraging to hear that Wales is still a muchloved tourist destination,” he said of the report. “But concerns over the cost of visits are alarming, considering Labour’s plans to raise them further with this levy.”

The Welsh Government is to launch a public consultation on its tourism tax plans this autumn. If green-lighted, the levy will be added to the bill for overnight stays at holiday destinations.

The size of any levy has yet to be decided and each local authority in Wales can choose if they want to introduce it.

Speaking at a hearing organised by the Parliamentary Welsh Affairs Committee, the value of tourism taxes was questioned by Anthony Pickles, former head of tourism affairs at VisitBritain. He told MPs that the UK was already amongst the world’s most expensive destinations, with Visitor Visas and Air Passenger Duty.

Further add-ons, such as higher VAT or a tourism tax, will make places like Wales “uncompetitive in the marketplace”, he said.

According to the Wales Tourism Alliance (WTA), many businesses in the sector are reining in investment amid fears of a crunch.

This loss of confidence stemmed not just from fears of a visitor slump but also from a “distrust of Welsh Government”, said the WTA. This was being caused by “hardline policy positions” arising from the Labour-Plaid Co-operation Agreement, it said. These have spawned a succession of measures to address Wales’ housing crisis but which are putting strains on businesses operating in the world’s “second most highly taxed tourism industry”, said the WTA.