Local fears grow as new law paves way for overnight stay levy across Wales

PEMBROKESHIRE Senedd Members Paul Davies and Samuel Kurtz have strongly condemned the Welsh Government’s new tourism tax legislation, warning it could deal a serious blow to the county’s fragile visitor economy.

Despite their opposition, the Visitor Accommodation (Register and Levy) Etc. (Wales) Bill was passed by the Senedd on Tuesday (July 8), granting councils the power to impose a charge of up to £1.30 per person, per night on overnight stays from 2027.

The law, passed with the support of Plaid Cymru, allows local authorities to introduce the levy at their discretion. While councils like Cardiff, Anglesey and Gwynedd have expressed interest, others — including Pembrokeshire — have not signalled any intention to adopt the scheme.

‘Ignored by Cardiff Bay’

Welsh Conservative MS for Preseli Pembrokeshire Paul Davies said the Welsh Government had “ignored the concerns of our tourism industry” and risked undermining a vital sector in the region.

“Operators in Pembrokeshire have made it very clear that they do not support this policy, and yet the Welsh Government has pushed ahead with a Bill that risks damaging one of Wales’ most important economic sectors,” Mr Davies said.

“Tourism is a huge part of the Pembrokeshire economy, and the sector has had a turbulent few years – facing additional regulations, thresholds and now this levy. The Welsh Government should be focussing on removing burdens and helping the industry build back post-Covid, rather than finding ways to squeeze the sector more.”

‘Labour clobbering small businesses’

Carmarthen West and South Pembrokeshire MS Samuel Kurtz echoed the criticism, accusing Labour of being out of touch with rural Wales.

“Tourism businesses are the beating heart of our local economy, but instead of backing them, Labour do what Labour do best and decide to clobber them with yet another tax,” Mr Kurtz said.

“An additional £1.30 nightly charge might sound small to out-of-touch politicians in Cardiff Bay, but on the ground, it will make Wales less competitive, deter visitors, and put jobs at risk.

“You just can’t compare Wales to cities such as Barcelona or Venice who have introduced a tourism tax. Our tourism industry is far less mature, and those cities have introduced the tax to actively deter visitors.

“Welsh Ministers should be concentrating on extending the visitor season, increasing the number of overseas visitors to Wales, and showcasing what we have to offer. Instead, they choose doom, gloom and extra tax.”

Mixed views from businesses and tourists

Commenting on the latest news on the tourism tax plans in Wales, William McNamara, Chief Executive of Bluestone said: “With the Visitor Levy Bill now set to be passed by the Senedd, we are entering a new chapter for tourism in Wales. While we now have greater clarity on the framework and rates [£1.30 per person, per night for most accommodation] many of our original concerns remain.

“Wales risks becoming less competitive, particularly for families and budget-conscious travellers, as this levy introduces an additional cost not seen across large parts of England.

“The flexibility for local authorities to raise the charge in future adds further uncertainty for businesses already navigating economic pressures.

“While the current administration of Pembrokeshire County Council, where Bluestone is situated, has publicly stated that it will not implement the visitor levy during its present term, we must remain vigilant and be prepared for potential changes following the next local elections in 2027.

“Tourism is vital to communities like Pembrokeshire, and at Bluestone, we’re committed to offering sustainable, high-quality Welsh breaks. We support investment in local services, but any levy must be fair, transparent, and come with a clear reinvestment strategy to keep Wales welcoming, accessible, and competitive.”

Under the new legislation, hostel and campsite visitors will pay 75p per person per night, while other accommodation types will be subject to the full £1.30 rate. Children under 18 will be exempt from the charge at hostels and campsites.

The Welsh Government says the levy could generate up to £33 million annually to support tourist infrastructure — including toilets, visitor centres, footpaths and beach facilities — if adopted nationwide.

But critics argue it risks pushing tourists away at a time when many rural areas are still struggling to recover.

Sammi Rogers, who runs Aran Hufen Ia ice cream shop in Bala, said the levy might influence people to “just go to a different area and not come to Wales.”

Nicky Williamson, policy lead at the Professional Association of Self-Caterers UK issued a statement to The Herald, saying: “We’re incredibly disappointed by the decision to press ahead with the tourism tax in Wales.

“Despite countless conversations and heartfelt warnings from across the tourism industry, the Welsh Government has pushed through a policy that risks doing real harm to the businesses working hard to keep Wales welcoming and vibrant. 

“For self-caterers, many of whom are small, family-run enterprises, this feels like yet another blow at a time when visitor numbers are already under pressure, with official Welsh Government figures showing a 29% drop.

“By their own assessment, this decline is expected to result in job losses. It’s frustrating to see decisions like this made without truly listening to those on the ground. Wales should be doing everything it can to encourage visitors, not making it harder.”

However, Bethan Evans, who operates a caravan park in Gwynedd, supported the idea in principle. “You can tell when the tourists come – roads are full, toilets are full, there’s more rubbish. Somebody should pay for that, it just makes sense,” she said.

Others, like English tourist Rachel Freeman, felt the measure was unfair. “We already contribute an awful lot to the country by coming here and paying into the local economy,” she said.

National backlash growing

An official impact assessment by the Welsh Government suggests the tax could result in as many as 390 job losses, depending on how widely it is adopted and how visitors respond.

Opposition has also come from trade bodies including the Welsh Tourism Alliance and Mid Wales Tourism, with concerns that the money raised will not be ring-fenced for tourism-related projects.

Meanwhile, Welsh Conservative leader Andrew RT Davies has vowed to scrap the tax if his party wins the 2026 Senedd election.

Despite the backlash, Finance Secretary Mark Drakeford defended the law as a historic move, calling it “the first local tax for more than 500 years to have been designed in Wales.”

He argued: “It is reasonable for visitors to contribute towards infrastructure and services integral to their experience, as they do in so many other parts of the world.”

But for many in Pembrokeshire’s tourism sector, the legislation represents yet another burden — and its implementation, if adopted locally, could have long-term consequences for an already stretched rural economy.

Welsh Government’s view

Finance Secretary Mark Drakeford said: “Visitor levies are used successfully all over the world. They ensure the pressures and opportunities tourism bring are balanced fairly between visitors and residents. We want the same for Wales.

“The levy is a small contribution that will make a big difference to our communities, helping to maintain and enhance the very attractions and services that make Wales such a wonderful place to visit and live.

“By voting to back this measure, Wales is joining many other worldwide destinations which already benefit from similar levies.”

The Welsh Government said that key elements of the Bill include:

• Giving local authorities the choice to introduce a visitor levy in their area, but only after consulting with their local communities.
• Ensuring all funds raised are retained and reinvested back into the local area to support tourism.
• The levy is set at 75p per person per night for adults staying in hostels and campsites and at £1.30 per person per night for all visitors staying in other types of accommodation.
• Under 18s are exempt from paying the levy when staying in hostels or campsites.
• 2027 is the earliest possible introduction date.

The Bill also introduces a national statutory register for all visitor accommodation providers in Wales. It will be free to join and will provide valuable data and insight about the size and scale of the sector across Wales.

The register will support ongoing policy development and decision-making at all levels of government. It will also ensure that the public are better informed about how property is being used in their areas.

The Welsh Government highlighted that it is investing heavily in tourism, including a £50m Wales Tourism Investment Fund and dedicated funding for weather-proofing grants.