In response to discussions held by local councillors who had touted the idea of a ‘Tourism Tax’ for the area, being introduced at a local government level (published in last week’s Observer) Tenby based rental accommodation business FBM Holidays have offered a response to the proposals.

“Whilst as a provider of local self-catering accommodation, we benefit from tourism, it’s also vitally important to point out the huge impact the tourism that we, and other businesses like it, bring into the local economy,” said Thom James, marketing executive at FBM Holidays.

“Tourism in West Wales is a natural resource. The area that we inhabit lends itself to tourism and provides residents with an ongoing income, which would be hard to replace should it be diminished.

“The knock on effect of a decline in tourism, no matter how slight would be catastrophic, as tourism really is the lifeblood of Pembrokeshire.

“While we concede that local authorities are being asked to tighten their belts, we understand the reasoning for discussing such proposals, but there are a lot of factors to consider.

“Firstly, and most pressingly, the UK has the joint-second highest VAT threshold for tourism-related businesses in Europe, both inside and outside of the EU, and offers no tax relief for businesses in tourism who contribute to the local authority.

“Countries like Ireland and Cyprus who have similar standard rates of VAT, offer tax relief to businesses within the tourism sector. This allows for a more competitive pricing structure which can be passed onto visitors and tourists, and will generate more revenue being generated overall.

“In 2008, it was argued in a parliamentary report that cutting tourism tax would raise substantial funds and create thousands of jobs. Yet, with no sign of this tax rate relief, then being subject to a proposal of an additional tourism tax adds insult to injury,” he continued.

Mr. James states that comparing the introduction of taxes in other areas to that in Pembrokeshire is ‘foolhardy’ at best, as areas such as Edinburgh for example, which was used as a beacon for those who have introduced a similar tax does not offer a ‘like-for-like comparison’.

“Edinburgh is an internationally-recognised travel destination and Scotland’s tourism agencies are spending a lot of money promoting the area, and as such, Edinburgh suffers from partial over-tourism,” remarked Mr. James.

“The same cannot be said for West Wales, but in particularly Pembrokeshire. For a long time, the local economy, worth circa £585m has stagnated, and adjusting for inflation, has not actually grown year on year.

“Whilst this economy is said to be highly valued by the local authority, in 2017, the budget given to the promotion of Pembrokeshire and it’s tourism department was a meager £57,000.”

Mr. James goes on to say that tourism budgets in the rest of the UK, specifically in England run into millions of pounds, creating a ‘buoyant market’ and contributing to a higher visitor level, meaning that introducing a tourism tax provides a beneficial way of funding council services and tackling overtourism in one fell swoop.

“Pembrokeshire, and larger parts of Wales do not have that issue,” he continued.

“Whilst some point to this as a positive reason, there is a balance to strike between increasing tourism levels and improving the overall economy in West Wales, and the overcrowding we see in places like Cornwall and Devon.

“Again, this is due in part to a lack of investment from the local authorities in the promotion of our region as a tourist destination.

“Implementing a tourism levy in addition to lack of promotional funding and investment, and at a time where there is great uncertainty in the European tourism market due to a number of factors, not least including Brexit.

“Brexit has created a huge amount of uncertainty in traditional international travel within the EU, but travel companies are committed to buying packages from hotels and resorts, so to counteract decline, they are slashing prices on holidays abroad.

“Therefore, Brexit is not the golden goose for the tourism industry for internal travel.

“The staycation industry is on the rise yes, but it’s more expensive to holiday in the UK, and challenging the already unfavourable current conditions with yet more increases to the paying customer would be seriously damaging to businesses and families in Pembrokeshire given the current economic climate and decades of ignorance from both local and larger governments,” added Mr. James.