Mark Drakeford has said he will look at bringing a "tourism tax" in place for Wales.
He made the pledge in a document explaining what he wants his government to achieve in the next five years. He has already made it clear he will not be First Minister for all that time.
Mr Drakeford gave the Senedd more detail saying his plan was to create powers for each of Wales' 22 councils to decide if they were wanted to introduce a scheme and said that it could benefit the tourism industry. He told Members of the Senedd: "I’m very clear in my own mind that a tourism tax, properly done, will benefit the industry because what it will allow those local authorities to do is to invest in the things that make those areas attractive to tourists in the first place. At the moment it is those local resident populations who pay for everything. They pay for the toilets, they pay for the car parks, they pay for the local museum, they pay for the local festival — anything that is put there to attract people into the area, it is those local residents who bear the cost in full.
"A tourism levy, charged on people who choose to go to those areas in a very modest way, when you add it all up, could be a significant opportunity for local authorities to invest in the conditions that make tourism a success. Where local authorities don’t believe that it would be a tool that they would seek to use they’d be under no obligation to do it".
Welsh secretary Simon Hart has said he thinks any tax on tourism businesses is wrong. He said any attempt to "try and exploit" tourism businesses as they try recover post-Covid "sends a worrying message". He added: "The idea that as we emerge back into the summer after Covid and the first thing that Welsh Government do is rub its hands [and say] 'How can we tax you?' — I think that's a message that will take a bit of explaining."
What is the timescale?
We asked the Welsh Government the timescale for any plans to bring in a tourism levy and the answer was: “The work to explore a potential tourism levy was paused due to the pandemic. We will resume engagement with the tourism sector and our partners in local government and our focus will continue to be on supporting the tourism sector in its recovery.”
Where else taxes tourists?
Edinburgh was widely expected to become the first place in the UK to get a "tourist tax" of £2 a night but the Scottish Government put it on hold last September. Their statement said: "Plans for the implementation of a transient visitor levy were put on hold as part of our response to the Covid-19 crisis and in recognition of the severe economic impact Covid-19 has had on the sector.
"Our priority right now is to work with the sector to ensure a vibrant and sustainable future for the tourism industry in Scotland and future consideration of the levy will take account of the changed context the industry is operating in."
Birmingham too had discussed a £1 a night levy for hotel guests. That was discussed to raise funds towards the city hosting the Commonwealth Games in 2022
Amsterdam, which had 18m visitors a year pre-pandemic, has one of Europe's highest tourist tax rates. The toeristenbelasting means additional charges of:
- 7% and €3 per person per night if staying in a hotel;
- 7% and €1 per person per night for camp sites;
- 10% of the turnover, excluding VAT and tourist tax for holiday rentals, bed and breakfasts, and short-stay accommodation.
Their city council said the fees would "contribute more to the high costs of keeping the city safe and clean, and of keeping the public space like pavements, quays, bridges and streets, in a good state".
Venice has also touted a fee of €2.50 to €5 per person but rising in summer months to €10.
Paris has a charge per person per night with the rate of charge varying by the star rating of the hotel. Bruges charges a flat rate of €2 per night per person, with children under the age of 18 exempt from the tax. Berlin’s city tax is 5% of the net room rate.
What does the industry think of it?
Ryan Davies runs Llanerch Vineyard in the Vale of Glamorgan. He says any plans to have a council to decide on any taxes on a local level is a bad idea.
"I think if it was something that was brought in in England or across the whole of the UK and then implemented in Wales that would be sensible but doing it in Wales when we're competing against places like Cornwall for local tourism, I think people will say they won't pay an additional levy if they can go somewhere else and not have to pay it.
"If it's going to be introduced it should be a nationwide approach and no difference between councils. If someone decides to go to, say, Cornwall on holiday and parking is £5 with a £1 tax but they can go across the border to Devon where it's £5 plus a £6 tax you know where they'd pick. It's like with coronavirus — the best approach has been when there's been one consistent message".
He said guests want to know what they are paying up front and not face extra charges when they arrive at a venue. To ensure that the hotel would have to add any tax at the time of booking which will make them look more expensive to other places without the tax in comparison.
Mr Davies said the post-pandemic focus should be on recovering from Covid. "It's the wrong time at the moment — it's about tourism recovery, not taxing people but encouraging them back".
However accommodation giant Airbnb has said it supports the call from Mr Drakeford. A spokesman said: “We support plans for a tourist tax in Wales and welcome the opportunity to work with Welsh leaders to make it a success as we have done already by helping generate nearly £2.5bn in tourist tax revenue in approximately 30,000 jurisdictions around the world.”
