Tourism tax plan given the green light

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00:00With iconic mountains, historic castles and spectacular coastline, Wales has attractions

00:06that bring in thousands of visitors. Tourism is a key part of the Welsh economy, but what

00:11impact will the new levy have? The 12th century Cymmerabi near Dolgellai is next to Geraint's

00:18Caravan Park, which also has camping pitches and self-catering cottages. While he recognises

00:23that busy tourist areas face extra costs, he also has concerns.

00:27We are taxing the people who are ready to contribute to the local economy by staying

00:34in accommodation. When you look at the figures, £75 for camping or £1.30 in self-catering,

00:40that adds up because as I've realised now it is the VAT on top of it, so we're talking

00:49about a family of five in a holiday accommodation, you're talking nearly £60 extra for a week.

00:54There are mixed views among the caravaners.

00:56It's like everything else. Once they start something, it will rise every year.

01:01If it's going to help and keep the places tidy and provide extra for everybody, then I think,

01:08yeah, go for it.

01:09Individual councils can choose to impose the levy or not. In Cardiff, council leaders like

01:14the idea.

01:15There are costs to putting on major events that the city council currently bears, and

01:19obviously this tourism levy can be used for us to meet some of those costs as long as

01:23it is enhancing Cardiff as a visitor destination. But of course we all benefit from a growing

01:27economy and we want to support the tourism economy here in Cardiff to grow even further.

01:31Welsh Government hopes the levy will raise £33 million a year. An academic who has studied

01:37the issue in other countries says how the money is used is key.

01:41If it is used to improve the service for the tourists, but also for the local people who

01:49live there and create the beauty of the place that creates the attraction, the cultural attraction

01:54of the place, of the destination, then in the long term it's not going to decrease the

02:00number of arrivals in overnight stays.

02:03Some feel urban areas could benefit more than rural counties. An impact assessment found

02:09the levy could reduce visitor numbers. There are concerns about this in Mid Wales.

02:14Well, the Welsh Government's own research has shown that they're looking at a 2-10% reduction

02:19in visitor numbers. Where you've got tourism levy in other cities or destinations, they could

02:25probably afford to lose a few visitors, whereas in Mid Wales we need every visitor that we can

02:29get the knock-on effects of our rural economy could be huge.

02:33After a debate in the Senedd this afternoon, the vote did pass and the new levy will now

02:38become low, with councils able to apply it from 2027.