Tourism tax would bring a costly toll

14 November 2017

Along with everybody else in our industry, I was stunned by news of a proposed new tourism tax for Wales being considered in the Welsh Government’s 2018-19 budget . As seen in some countries in Europe, the proposed tax would bring an additional charge levied on visitors staying in Wales.  

With tourism such an important part of the Welsh economy, it would be a hugely detrimental step to introduce a measure which would discourage visitors from staying in Wales and mark the country out in such a negative way against our competitor destinations in other parts of the United Kingdom. 

Tourism taxes are seen as a hidden charge and unpopular with visitors to countries where they are levied. Many of these countries are only able to impose such a tax because they do not face the same levels of VAT on tourism that the UK does. In the Eurozone, 16 of 19 countries have tourism VAT rates of 10% or less and Ireland, a direct competitor for Wales, has a rate of 9%.

Tourism is more important to Wales than any other part of the UK, accounting for 4.9% of economic output compared to 3.7% in the UK as a whole. Tourism outperforms all other Welsh Government priority sectors and is Wales’ second largest employer.

Here at Celtic Manor, we employ more than one thousand people and contribute more than £30m per annum into the Newport area economy through wages, salaries and contracts with local suppliers.

Celtic Manor is an iconic destination venue bringing tourists of all types into Wales, many of whom go on to visit other attractions in Wales. A tourism tax would seriously jeopardise our ability to continue our rapid recent growth as a resort and carry on making this valuable contribution to the Welsh economy. 

Welsh Government is to be congratulated on how it has promoted tourism in recent years as well as the current drive to generate more business tourism in this country centred on the construction of the new ICC Wales. Any tourism tax would undermine this good work and excitement for the future.

Adding extra cost to staying in Wales would have just as damaging an effect on attracting business events as it would on attracting leisure visitors. Securing large conferences and association meetings is a very competitive sector and an additional tax on the thousands of delegates who attend these events would be a significant deterrent to those considering Wales as a venue.

With ICC Wales facing enough challenges being so new to the market, we are not in a position to shoulder any additional burdens in negotiating new business and new revenue opportunities for Wales.

We have just celebrated the announcement of the scrapping of the M4 tolls and the reaction to that news showed just how powerful a deterrent to visitors a mandatory levy can be. We should be removing more obstacles to bringing in visitors, not introducing new ones.

As well as those directly employed by the tourism sector in Wales, many more people in the supply chain could also be affected with a devastating impact on jobs and small businesses.  

It is surprising that this tourism tax is even being considered as a new way of generating income for Welsh Government and we feel sure the destructive long-term consequences it will visit upon the economy in Wales will far outweigh any short-term benefit.

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