PASC warns tourism sector could buckle under 182-day rule

HOLIDAY let owners across Pembrokeshire and the wider Welsh tourism industry say they are being pushed to breaking point by “brutal” tax changes that could cost thousands of jobs, force businesses to close, and lead to mental health crises among struggling operators.

The Professional Association of Self Caterers (PASC UK) says Welsh Government reforms introduced in 2023—intended to free up housing stock for local people—are having unintended and damaging consequences.

Under the new system, self-catering properties must be made available to let for at least 252 days a year and actually let for 182 days in order to qualify for business rates. Failing that, they are classed as second homes and liable for full council tax—often with steep premiums of up to 300% applied by local authorities.

The Herald understands that many operators, particularly in rural Pembrokeshire and west Wales, are simply unable to meet those targets during the quieter winter months, and are now receiving council tax bills running into tens of thousands of pounds.

One such case, cited by PASC, involved a farming family—previously encouraged by Welsh Government policy to diversify into tourism—who were hit with a £37,000 bill after falling short of the 182-day threshold.

Nicky Williamson, chair of PASC Wales, said: “Without this bed stock, we simply won’t have the capacity to house tourists. And if the tourists stop coming, the pubs, the cafés, the shops—everyone suffers. This is a domino effect that could be catastrophic for our communities.”

She added: “The mental health strain is immense. Operators are telling us they’re lying awake at night worrying about unexpected council tax demands. The uncertainty is brutal.”

A recent PASC survey found that 94% of respondents reported increased stress levels, with 60% saying they did not expect to meet the 182-day requirement this year.

DISCOUNTS, PANIC AND EMPTY HOMES

Karen Jones, who operates a holiday cottage business in Conwy county, said she and her husband had resorted to offering 20% discounts during February and March to lure back regulars. “If a booking cancels, panic sets in. We delay maintenance work, we scramble to fill gaps—it’s unsustainable.”

Frankie Hobro, who owns Anglesey Sea Zoo, said visitor numbers had fallen more than 20% since 2023. She directly linked the drop to the 182-day rule and fears the knock-on effects could be devastating.

“We’re seeing huge numbers of empty homes up for sale—but they’re not being bought by local families. They’re being snapped up by corporate buyers who can afford to keep running them commercially. That doesn’t help communities—it does the opposite.”

The closure of Oakwood Theme Park in Pembrokeshire last month has already sent shockwaves through the sector, and Hobro warned that more businesses could follow unless action is taken. “We’re sleepwalking into a tourism crisis,” she said.

‘TOO FAR, TOO FAST’

William Matthews, who runs Oyster Holiday Cottages in north Wales, told The Herald: “We understand the principle—these homes shouldn’t just sit empty all year. But the bar has been set too high, too fast. There needs to be more flexibility.”

Matthews said his agency had always tried to extend the season into the so-called ‘shoulder months’, but the weather and school term patterns often made it impossible to reach 182 days of bookings. “This rule may have tipped the balance too far,” he warned.

BALANCING HOMES AND JOBS

Welsh language campaign group Cymdeithas yr Iaith has supported the changes, arguing they help reduce the dominance of second homes and rebalance the housing market. Spokesperson Jeff Smith said: “We need to prioritise local people who are being priced out of their own communities. This policy helps make housing more accessible.”

The Welsh Government defended the move, saying: “We recognise the importance of tourism to the Welsh economy, but must balance that with the needs of our communities. Everyone has the right to a decent, affordable home.

“Our package of measures is designed to ensure that second home owners and holiday let operators are contributing fairly to local services and infrastructure.”

Figures show around 159,000 people are currently employed in tourism across Wales, many in coastal and rural communities like Pembrokeshire. PASC has warned that without a rethink, a significant proportion of those jobs could be at risk in the coming years.

Wales’ largest building society – The Principality – is celebrating its 165th year birthday in style after announcing its commitment to maintaining its high street and community presence until at least the end of 2030.

Announced as part of the organisation’s Annual General Meeting (AGM) last week, Principality confirmed its intention to  extend its commitment to the communities it serves, recognising the importance of a high-street presence, access to cash and in-person services. 

First established in Cardiff in 1860, Principality continues to provide a community cornerstone with over 50 branches and 14 agencies across Wales and its borders, partnering with charities and funding affordable home initiatives along with its financial services.  Pembrokeshire is served with two branches based in Fishguard and Haverfordwest.

Principality’s own research reveals more than 70% of people agree that branch presence is a key factor in deciding which financial provider to choose. This comes against a backdrop of branch closure announcements from providers across the UK and wider markets.

“All our branches have played an integral role in supporting their local communities, and today’s announcement means that our members can continue to access essential in-person services for years to come as we maintain our presence in the community,” commented Vicky Wales,who is the chief customer officer at Principality Building Society.

Principality’s continued commitment to local communities is further demonstrated by its recent partnership with shared banking innovator OneBanx to bring cash services to rural areas affected by bank closures. 

“As more financial institutions announce branch closures, we remain focused on supporting our members and the local community with vital financial services,” said Kelly Young, who is head of customer services savings.

“We know that access to cash and our extensive branch presence enables us to provide the services that our members rely on.”

PEMBROKESHIRE’S Nestlé bottling plant was given the once over by local MP Henry Tufnell this week when he visited the Waters & Premium Beverages bottling site in Princes Gate near Narberth.

The visit marked Tufnell’s first visit to the factory since his appointment as MP for Mid and South Pembrokeshire in July, 2024.

He met factory manager Matthew Faulkner, and engaged with staff, learning about the company’s commitment to stewarding water resources and helping to regenerate local water cycles.  He also learned about the plant’s operations, sustainability initiatives and its on-going commitment to local employment.

“It was a pleasure to welcome Mr Tufnell to our factory,” commented Matthew Faulkner, “as his visit provided a wonderful opportunity to introduce our team and showcase our factory and what we do.

“We take pride in being part of the local community and are committed to supporting local initiatives and helping create a positive water impact locally.”

The workforce at the bottling site consists of more than 120 employees, including specialists in production, warehouse operations, quality, safety, and water management, with the majority residing within a 20-mile radius of the factory.