Tourism tax: How is the Welsh tourism industry is faring and what are its struggles?

Cost of Living Correspondent Carole Green explores how businesses are faring in Wales' key tourist hotspots

A controversial tourism tax, which could see tourists pay an extra fee for overnight stays, is not the biggest and most pressing issue facing the industry, according to businesses.

The planned tax has dominated recent conversation, but business owners say energy costs are among the biggest struggle they face.

The comments come as the tourism and hospitality sector prepare for the crucial summer season in Wales.

Bookings at Bobby's hotel in Llandudno have been down for six months - the business is losing money by staying open. Credit: Sharp End

Bobby Katoch, who runs the Space Boutique Hotel in Llandudno, told ITV1’s Sharp End: "Gas and electricity has trebled. With where we are at the moment the hospitality sector isn't a viable business."

Bookings at the hotel down have been down for six months whilst costs have spiralled - the business is losing money by staying open.

"People are being cautious as well as businesses are being cautious,” he said. “We have to be open because we wouldn't be able to survive if we were shut.”

Tour guide Amanda Whitehead says the British market is down but tourists from further afield still visit. Credit: Sharp End

Amanda Whitehead, an Official Wales Tourist Guide, says the season has got off to a good start.

"We've got a lot more cruise ships coming into Holyhead this year so there's a lot of day excursions from there. My town tours and castle tours are up on last year.

“The British market may be down a bit because people have been pining for that overseas break so they're not doing quite as many short breaks.

“(Cost of living) isn't affecting me so much as a tour guide. Many people aren't coming for so long staying in quite the same quality but once they get here they're still doing lots of activities.”

Sean Taylor, Co-founder of Zip World, has found people are making more last minute bookings. 

“Maybe they're hedging their bets with the weather,” he said. “But I think if you've got a compelling reason to come people will still come.

“There's some people suffering, especially in the accommodation with the 182 rule. It's a bedrock of the industry, if people have nowhere to stay we're going to have fewer people coming.”

The '182-rule' on accommodation could cause knock on effects for tourism-led attractions, ZipWorld's Co-Founder said. Credit: Sharp End

New rules brought in by Welsh Government on April 1 says holiday let properties must be in use for at least half of the year to be classed as a business.

Tom Giffard, shadow minister for tourism, has previously spoken out against the plans in the Senedd - and disagrees with the upcoming tourism tax proposals.

He said: “The government need to ditch this tourism tax which is going to add costs onto tourism and onto holidays, particularly for those cost-conscious travellers.

“A lot of places use it to deter tourists - I want to see more people come to Wales.”

But Tourism Alliance Chair, Suzy Davies, denies that Wales is too expensive to visit.

She said: “There's a whole range of holidays available here depending on your budget. There's something for everybody. Wales is facing a lot of competition from cheap, overseas holidays and a huge amount of competition on social media and it has to compete in that atmosphere.

“What hasn't helped is all this chatter around a tourism tax here in Wales, which, even though it is going to come in, isn't going to come in for a few years yet and so there are still plenty of places to come in Wales which are value for money and will surprise you about how marvellous they are.”

She continued: “One of the differences between us and other countries with tourism tax is that we have 20% VAT here in the whole of the UK and one of the things we'd be asking Welsh Government to do is not to add further tax burdens on to businesses which are already dealing with VAT and other costs, notably energy.

“Any additional tax is going to be a disadvantage for Welsh businesses because they will either decide to try and absorb it themselves, which affects their viability or they will load it onto customer's bills and then you're going to start noticing that Wales is a bit more expensive.”

Plaid Cymru MS Luke Fletcher told Sharp End’s panel that high VAT and energy costs are hitting the industry most.

He said: "The conversation around tourism - and the success of tourism - has hinged a lot on tourism tax from the Conservative point of view.

"If we really want to stand up for tourism and hospitality in the here and now, then we have to tackle these issues first - high VAT receipts and high energy costs."

Labour’s Cynon Valley MS, Vikki Howells, pointed to the Welsh Government spending £60m over the next five years as part of its tourism strategy.  “I do think the Welsh government is investing and does recognise the value of tourism here,” she added.

You can see more on this story, plus the latest political discussion on Sharp End, Mondays at 10.45pm, on ITV1 - catch up here