Update on proposals for a discretionary visitor levy for Wales

Rebecca Evans MS, Minister for Finance and Local Government has issued the following statement on proposals for a discretionary visitor levy for Wales.

Today I am providing an update about our proposal to provide local authorities with the power to introduce a discretionary visitor levy. A levy would be a small charge paid by people staying overnight in commercially-let accommodation, raising new money to be re-invested in local areas.

This work is being undertaken as part of the Co-operation Agreement with Plaid Cymru.

A public consultation closed on 13th December. It explored the proposed design of the visitor levy and how it could operate on a practical level. An independent report of responses was commissioned in January, and I am today publishing these consultation findings visitor levy summary of responses, alongside a consumer research report, which explored views among the public about a visitor levy.

We received more than 1,000 responses to the public consultation, and I am grateful to everyone who responded and their feedback. I recognise the concerns raised by representatives of the tourism sector and I want to reassure business owners we are committed to supporting businesses through current economic challenges.

We will be proceeding with legislative proposals which enable local authorities to raise a visitor levy in their areas. As we develop the visitor levy policy, we will consider the consultation responses to help shape a proposal that works well across Wales.

A common concern expressed by some of those responding to the consultation was that people would stop visiting Wales if a levy was introduced. Similar visitor levies are used in many countries around world to the benefit of local areas, which continue to see thriving visitor economies. We believe this success can be replicated in Wales and that local communities should be empowered to decide whether to implement a levy or not.

We are often asked about the application of a levy to visitors not staying overnight. We have not identified a practical method of applying a levy in the context of day visitors given the variety of activities that these visitors undertake and in a way that would not directly impact residents. We know that an overnight visitor levy is a model that works, as demonstrated by the many destinations that apply a similar charge internationally.

In addition to the public consultation, bespoke consumer research was commissioned to obtain some insight into the views of both Welsh residents and UK consumers of domestic holidays.

More than 2,500 respondents took part in the survey – 1,005 of whom lived in Wales.

Those surveyed broadly supported the principle of a visitor levy. The consumer research found that most Welsh residents surveyed agreed that tourists should contribute towards the costs of maintaining and investing in the destinations they stay in, with support stronger among Welsh residents surveyed who live in areas with lots of tourism.

The research also showed that when introduced to the concept of a ‘visitor levy’ in a place where they go on holiday or in their area, respondents to the survey were more positive than negative – 45% were positive, and 25% were negative.

As we progress legislative proposals, we will continue to assess the potential economic impacts, as well broader environmental, social and cultural impacts, of implementing a visitor levy in Wales. However, it is important to recognise that across the many destinations where similar levies are implemented, visitor economies continue to thrive.

Additionally, I have asked the Welsh Revenue Authority to lead a project to understand the operational requirements for implementing a Visitor levy across 2023-24. This work will be undertaken collaboratively with local authorities and businesses. They will look to commence the discovery portion of this project in April.

We know that tourism plays a vital role in supporting local economies. But unbalanced, poorly supported tourism can also put pressure on local communities and undermine the high-quality experience we all want to offer our visitors.

Our intention with the visitor levy is to bring about a sense of shared responsibility between residents and visitors, to protect, and invest in, our local areas. As hosts, we are asking visitors – whether they have travelled from within Wales or from further afield – to make a small contribution towards maintaining and enhancing the place they are visiting encouraging a more sustainable approach for tourism.

The visitor levy puts power into the hands of local communities and gives them a tool to encourage sustainable, regenerative tourism. Over the coming months and years, we want to work with businesses, local authorities, and all of our key partners to design a visitor levy for Wales that will be a force for good.