New tax legislation enabling councils in Wales to introduce a tourism levy on overnight stays is expected to be approved by the Senedd today.
The new law would allow local authorities to apply a nightly charge to visitors staying in accommodation across Wales. Under current proposals, guests staying in hotels, guesthouses and other commercial properties would be charged £1.30 per night. Visitors using hostels or campsites would pay a lower rate of 75p per person per night. The charges would be subject to VAT, with exemptions in place for under-18s staying at hostels and campsites.
The Welsh government estimates the measure could generate up to £33 million a year if adopted by all councils.
Plaid Cymru’s support ensures the Labour-led government has the majority required to pass the legislation.
While the bill grants powers to local authorities, implementation will be voluntary. Individual councils would choose whether or not to adopt the levy, which would not come into effect until 2027 at the earliest. They would also have the ability to revise the rate after one year, subject to agreement with the Welsh government.
The proposal fulfils a commitment made in Labour’s 2021 Senedd election manifesto and was part of its previous co-operation agreement with Plaid Cymru. It was developed in response to increased pressure on local infrastructure and services in popular tourism areas.
The Welsh government has highlighted that the funds raised could support footpath maintenance, visitor centres, public toilets, beaches, and projects promoting the Welsh language. How the revenue is allocated will be decided locally by each council that implements the levy.
According to the government’s impact assessment, the economic outcomes of the policy could vary, with estimates ranging from a £10.8 million boost to a potential £7.3 million reduction in economic activity. Employment impact projections suggest the creation of up to 100 new jobs, or a potential reduction of up to 390 jobs, depending on how the levy affects tourism behaviour.
With many local authorities struggling to balance their books, adopting the tourism tax could prove popular in the short term, despite the long term economic impact being uncertain.
Commenting on the latest news on the tourism tax plans in Wales, William McNamara, Chief Executive of Bluestone National Park Resort, a 5* luxury holiday resort in Pembrokeshire, 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.”
