‘TOURISM tax’ is here to stay, despite a recent attempt to scrap it.

Last September, the Visitor Accommodation (Register and Levy) Etc. (Wales) Act 2025 started moves towards a local tax on visitors staying overnight, with each local authority getting to decide if it wants to charge the fee.

Despite it being a modest £1.30 +VAT per person, per night for most types of holiday accommodation (75p for tent pitches, hostels and dorms), if all local authorities used a visitor levy it would generate up to an estimated £33 million per annum across Wales.

However, in the plenary session on July 8, Reform UK tabled a motion proposing the Senedd: “Recognises the vital of contribution of the tourism sector to the Welsh economy, directly supporting more than 150,000 jobs”; “Celebrates Wales as a world-class destination” and “Calls on the Welsh Government to support the tourism sector by a) scrapping the tourism tax; and b) lowering the 182-day occupancy threshold for self-catering businesses.”

The 182-day threshold means that a holiday let in Wales must be occupied by paying guests for at least 182 days in the year to qualify for Business Rates - and potentially Small Business Rates Relief. Properties falling short are reclassified as domestic homes, requiring standard Council Tax plus any local Second Home Premium.

The motion was voted in, but not before a government amendment reworded the third point to “Welcomes the Welsh Government’s support for the tourism sector by: a) promoting the visitor levy as a choice for local authorities, that can enable new investment into local tourism; and b) delivering the Government’s commitment to keep the 182-day occupancy threshold for self-catering business under review and create clear and reasonable exemptions where a property would not qualify as a private home.”

Elwyn Vaughan MS (Plaid Cymru) argued: “The truth is that tourism taxes are common worldwide, including in Amsterdam, Venice, Barcelona and Paris.” He argued that the levy does not penalise the tourism sector, but boosts income for local government.

But critics of the Welsh scheme say Wales hospitality providers already pay high levels of tax.

“Layer a visitor levy on top of this and we’re pricing Wales out of the market when we're trying to grow the sector.” said Louise Emery MS (Reform) as she moved the motion.

Sector leaders in Powys have argued the levy could hurt small-scale operators already burdened by the 182-day holiday let occupancy rules, and that it could discourage visitors, particularly those from lower-income backgrounds.

On the other hand, tourists make heavy use of local amenities like public toilets, coastal paths, parks and beachfronts. In popular regions like Snowdonia and Pembrokeshire, massive seasonal influxes put a strain on bins, parking, and rescue services.

Through the levy, an authority can raise money from its overnight visitors to help offset their impact on the local area.

Gwynedd and Conwy opted to launch public consultations on introducing the visitor levy, alongside another North Wales council: the Isle of Anglesey (Ynys Môn).

These have now ended, and each of the three councils will announce the decision after September 24, 2026.

During the debate on July 8, Anna Nicholl MS (Plaid Cymru) said: “Tourism accounts for around 13 per cent of all employment in Ceredigion and 23 per cent in Pembrokeshire…

“But evidence gathered from the previous Government showed that high levels of tourism, if not managed, can have a negative impact on an area.”

“High levels of second homes and short-term lets can impact on local housing markets and the sustainability of local communities, particularly in areas where properties are not occupied for much of the year,” she added.

However, Pembrokeshire County Council’s decision last April that it would not introduce a tourism visitor levy during the current administration (which runs until May 2027) means no visitor tax can be implemented in the region until at least 2029. The deputy leader Cllr Paul Miller said at the time he supported having the option for a visitor levy but felt that it “was not the right time,” following significant changes in tax and regulations affecting tourism operators.

Leading the rollout, Cardiff Council has formally voted to adopt the visitor levy.

Drawing on his experience as former leader of Cardiff Council, Huw Thomas MS (Labour) said:

“Here’s the mad thing, for all the visitors that come to Cardiff, often as part of events that the council is delivering, for all the money they spend in local bars, restaurants, hotels, for all the overnight clean-up operations required after 70,000 people have partied in the Principality, the council receives not one penny of income, thanks to the completely centralised taxation system we have in this country.”

He continued: “A visitor levy, estimated to raise about £3.5 million a year for Cardiff, starts to change that calculation so that the council raises revenue from major events to in turn fund a better experience for visitors and residents alike. And it will also allow Cardiff to attract new events to the city and also better market ourselves internationally.”

In Cardiff, 62 per cent of consultation responses supported those proposals, recognising how the money would be ring-fenced to support the visitor economy.

“It's not a tourism tax, it's an investment in tourism. It's a modest contribution from visitors towards services, infrastructure and attractions that make Wales such a desirable place to visit in the first place.”

Other councils seem reluctant to follow Cardiff’s lead. Vale of Glamorgan Council stated they have no current plans or appetite to introduce the levy. Monmouthshire County Council has opted out for the foreseeable future to protect cross-border tourism. Add to that list Wrexham, Flintshire and Denbighshire.

There are no active plans in Blaenau Gwent, Merthyr Tydfil, Torfaen, Caerphilly, Rhondda Cynon Taf, Bridgend, Neath Port Talbot and Newport City, areas which see minimal overnight tourism.

Meanwhile, four councils with mid-to-high tourism levels - Swansea, Carmarthenshire, Ceredigion and Powys - look to be weighing up the pros and cons, perhaps watching the how the initial rollouts perform in Cardiff and North Wales before launching their own consultations.

MWT Cymru (representing over 600 businesses across Powys, Ceredigion and Meirionnydd), has expressed strong opposition.

For high-tourism areas, particularly, the levy has its advantages - helping to keep vital facilities open year-round, subsidising maintenance - lifting the burden on local council tax payers, and combatting the “winter ghost town” effect.

Gwynedd Council plans to fund local events, festivals and cultural activities in the off-season months, giving businesses a reason to stay open and providing community hubs for residents.

It can also be used to protect Welsh language and culture against the disruption caused by seasonal property-buying.

Regardless of where individual councils stand, all providers offering stays of 31 nights or fewer will need to register with the Welsh Revenue Authority between October 1, 2026 and March 31, 2027. The resulting data is expected to help local authorities better understand the scale and location of visitor accommodation, with implications for planning policy, local development plans and future investment decisions.

With Plaid Cymru now leading the Welsh Government, planning and development consultancy Lichfields warns that tourism developers in Wales will need to show much clearer local benefit as planning policy evolves.

The firm says future tourism proposals are likely to face closer scrutiny on community value, Welsh language, local jobs and early engagement.