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Why are councils backing away?

The plan for a tourism tax is back in the spotlight in Wales as local authorities take different approaches. Anglesey Council has rejected it for now, saying the tourism sector is already under pressure, while Gwynedd and Conwy have delayed their decisions. According to the Welsh government, Cardiff is currently the only local authority that appears close to introducing the tax in 2027.

The scheme prepared by the Welsh government would give councils the power to charge a fixed fee per person, per night. The revenue is intended to be spent on tourism services, infrastructure, visitor facilities and the promotion of the Welsh language. Councils would also be able to hold a consultation in the future on a higher rate and set a new tariff, provided they give at least 12 months’ notice.

How would the charges and exemptions work?

If the law comes into force, nightly charges would vary depending on the type of accommodation:

  • 75 pence + VAT: hostels, shared rooms and campsites
  • £1.30 + VAT: most other accommodation types

Stays of more than 31 nights, people forced into temporary accommodation and those staying in shelters for homeless people would be exempt from the tax.

Why do experts want a more flexible model?

Dr Linda Osti says the current model in Wales may not produce the same result in every area because it relies on a single council-wide rate. According to the Bangor University academic, Eryri, Porthmadog, Cardiff and coastal destinations do not share the same visitor profile; for that reason, setting the charge, exemptions and scope at a more local level could ease the pressure on tourism demand.

Osti also says tourism businesses are uneasy about how the tax revenue would be spent. By contrast, powers given to regional mayors in England to levy a nightly tax with no upper limit have raised expectations of a more flexible framework for rates and exemptions.

Why is Cardiff being viewed differently?

Cardiff stands out as a market that, in the expert’s view, is more resilient to price increases because business travel and short city breaks are more common. The city plans to introduce the tax on bookings made from 28 September for stays from 1 April 2027 onwards.

Main concerns about market impact

Local consultations have also shown the sector is split. More than 2,000 people took part in the consultation in Anglesey, where concerns were raised that the island could lose competitiveness as a holiday destination and that visitor costs would rise. In Gwynedd, around 7,000 responses prompted further analysis, with early findings showing more support from residents and more opposition from visitors and businesses.

In Conwy, councillors also delayed a decision amid concerns that bookings could fall, stays could get shorter and visitor spending could decline. Some businesses, however, argue that the tax could be needed to help cover costs such as roads, parking and waste management during busy periods.

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