7. 7. Welsh Conservatives Debate: A Tourism Tax

Part of the debate – in the Senedd at 5:05 pm on 25 October 2017.

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Photo of Caroline Jones Caroline Jones UKIP 5:05, 25 October 2017

Okay. According to a 2014 report by Geoff Ranson of the Cut Tourism VAT campaign group—specifically, he reports:

The UK is the highest in comparison with the other countries being nearly 3% higher than Germany and over 5.5% compared with Ireland which is the lowest of the comparator countries, who removed the airport tourist tax on 1 April 2014.’

Consider this report together with the British Hospitality Association’s statement made this year that European visitor numbers to the UK are already down due to the increased threat of terrorism. Any suggestion that you can improve Welsh tourism with a tax that may increase prices on tourists would seem far-fetched. According to the Welsh Government, in 2016, tourists spent around £14 million a day whilst in Wales, amounting to £5.1 billion a year, and Professor Annette Pritchard, director of the Welsh Centre for Tourism Research at Cardiff Metropolitan University, when speaking to BBC Wales’s ‘Week In Week Out’ programme, said about tourism in Wales, and I quote:

We are not doing as well internationally as our competitors, we’re getting about 3% of visitors and about 2% of spend.’

This contrasts to our having roughly 5 per cent of the population. So, this suggests that Wales is already underperforming on tourism. Wales has much to offer to those who wish to enjoy our splendid countryside and coastlines. Therefore, any tax that increases the cost of visiting Wales is likely to reduce tourism in an already underperforming sector that is situated in an overall high-tax environment. If we consider consumer spending habits, price and cost are usually, if not always, a factor as to whether someone makes a purchase, and tourism is no different in this. This vitally important industry must be protected, encouraged to grow, and encouraged to improve its performance. It should not be squeezed with any more tax.

Anthony Rosser, chair of the British Hospitality Association in Wales and manager of a hotel in Wales, said in a recent interview about any proposed tax,

It would be an utterly retrograde move. We…have very real worries over the recent cauldron of costs that have boiled over in the last 18 months, including increases in business rates…rising inflation and food and energy hikes. Increasing costs like this will…be handing an unfair advantage to our competitors’.

Finally, it might be said that the tourism tax could be set to a very low level, perhaps £1 a night. Indeed, the Bevan Foundation, which is not part of the Welsh Government, this made the suggestion in a recent blog post and other reports, and they said that such a levy could be capped by Welsh Government. My concern about this is that it leaves a door ajar that could be pushed wide open by Government.