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The potential implementation of a tourism tax in Wales has sparked controversy, with the UK’s largest holiday let provider, Sykes Holiday Cottages, warning that such a move could have negative consequences on the economy. The Welsh government is proposing a levy of £1.30 plus VAT per night for hotels, B&Bs, and self-catering accommodations, along with 80p plus VAT for hostels and campsites, potentially starting from 2027 pending Senedd approval. This levy aims to generate up to £33 million annually to enhance tourism in local areas, with individual councils deciding whether to impose it.
Sykes Holiday Cottages raised concerns about the adverse economic impact of taxing overnight stays, arguing that it might deter visitors and make Wales less competitive. Ben Spier, a representative from the company, highlighted the recent closure of Wales’ largest theme park due to rising costs, questioning the wisdom of imposing additional taxes on tourists. He emphasized the potential repercussions on border towns and local businesses if visitors opt for tax-free destinations in England, potentially leading to job losses and decreased competitiveness.
On the other hand, some industry experts, like Dr. Linda Osti, believe that a tailored approach to a tourism tax might benefit specific areas in Wales. Dr. Osti, a senior lecturer in tourism management at Bangor Business School, suggested that different destinations require unique strategies, rather than a blanket tax across the country. She noted that while initial visitor numbers might drop in certain regions due to a tax, long-term benefits could include improved services and increased tourism revenue. According to her, Wales has the potential to implement a levy effectively if done thoughtfully.
Steven Hesketh, director of Hotel Wrexham and advocate for a tourism levy, proposed a model where industry operators manage the funds generated. Drawing on his experience with the Liverpool Accommodation Business Improvement District, Hesketh emphasized the importance of transparency and industry involvement in deciding how tourism funds are allocated. He suggested a similar approach in Wales, where hoteliers and other tourism stakeholders have a say in how the revenue is reinvested back into the industry for mutual benefit
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