A proposed tourism tax would damage the economic performance, brand and prospects for Wales, warns a new report commissioned by the organisation that represents all sectors of tourism industry in Wales.
Wales Tourism Alliance (WTA) is pressing the Welsh Government not to choose a tourism tax from the four new tax raising power proposals it’s considering.
The WTA is so concerned about the proposal that it has asked Annette Pritchard, professor of tourism at Cardiff Metropolitan University, to prepare a report on the subject. (See previous article for report link).
Her report states: “The UK tourism industry has one of the world’s highest tax burdens. Most European countries have significantly reduced VAT on their tourism industries to encourage growth, employment and revenue. The imposition of higher taxes has been shown to inhibit growth, employment, revenue and holiday-taking.
“Tourism outperforms all Welsh Government priority sectors and is the country’s second largest employer. A proposed tourism tax will damage its economic performance, brand and prospects.
“It will also increase social exclusion, undermine policies to create a more healthy and active Wales, limit opportunities for economic growth in Welsh-speaking heartlands and disproportionately impact those least able to afford to take a holiday.”
WTA chair Adrian Barsby has written to Wales’ First Minister Carwyn Jones, warning that tourism businesses had already faced significant business rate increases and a tourism tax would make them uncompetitive in the UK market.
“Prices will rise and Wales will gain the unenviable reputation of being the only country in the UK which charges its visitors to stay,” he said. “This will damage the growth potential of the industry at a time when post-Brexit it may be called upon to play an even greater role in the Welsh economy.”
Mr Barsby said the WTA acknowledged that the industry imposed additional costs on local authorities, but the Welsh Government’s formula for allocating financial support to councils made explicit provision for this.
The WTA is seeking an urgent meeting with the Welsh Local Government Association to discuss ways in which the industry may be able to help.
“We understand the pressures on local authorities at the most popular tourist destinations in Wales,” he added. “However, we believe that visitor management by the industry in collaboration with local authorities, Welsh Government and destination partnerships is the most sustainable way of dealing with such issues rather than a simple sledgehammer to crack a nut device such as a tourism tax.
“I would add that whilst imposing additional costs on local authority services, tourism also helps to sustain a wider range of facilities for residents to enjoy than would be the case without the industry.
“A tax on tourism businesses would damage local economies and affect employment prospects by making us less competitive with destinations in England.”
Mr Barsby has welcomed a pledge by Ken Skates, Cabinet Secretary for the Economy and Transport, to consult fully with the industry on the tourism tax proposal. Mr Skates has been presented a copy of Professor Pritchard’s report to Mr Skates
“This will give the alliance and other organisations an opportunity to elaborate further on how damaging this will be for the industry and the economy of Wales and that consequently it should not proceed,” he concluded.
For more information please contact either Adrian Barsby, Wales Tourism Alliance chairman, on Tel: 01352 741998 or 07921 787668, Paul Loveluck on Tel: 01686 650818 or Duncan Foulkes, public relations adviser, on Tel: 01686 650818.