Senedd Cymru | Welsh Parliament
Y Pwyllgor Cyllid | Finance Committee
Bil Llety Ymwelwyr (Cofrestr ac Ardoll) Etc. (Cymru) | Visitor Accommodation (Register and Levy) Etc. (Wales) Bill
Ymateb gan Cyngor Bwrdeistref Sirol Conwy| Evidence from Conwy County Borough Council
(We would be grateful if you could keep your answer to around 500 words).
CCBC agree with the general principles of the Bill as the funding could be beneficial to local authorities, especially in this current financially challenging time. However, we have a number of reservations about how this would be put into practice and huge impact on our Tourism businesses within the county. These are detailed below and are in no order of precedence:
10.1 No economic impact assessment carried out to determine true benefit of charging a Visitor Accommodation Levy (VAL). Without this, there’s even less incentive for sector to support the VAL. Additionally, some areas in Wales will generate more income than due to their tourism offer being larger and more established, but there’s no report detailing how much income is likely to be collected per area. Estimate to be generated for whole of Wales is £33m but no breakdown of this figure per local authority (LA) is available. How was £33m reached?
10.2 Visitor Registration and Licensing Scheme (VR&LS) should have been implemented in advance of a VAL and not in parallel. Now face having to deal with issues for two schemes at the same time.
10.3 Concerns re level of administrative cost attached to the WRA in setting up and monitoring the VR&LS and the financial and resource burden on LAs – all of these costs to be recouped (we expect) from the Levy at detriment of the businesses and communities.
10.4 Concern that some businesses may avoid imposing a VAL as they operate under the radar. The risk of providers not being accurately registered – including where exemptions are available – is a key area for the WRA to manage, and can be resource intensive. Will LAs have additional powers and resources in order to police this?
10.5 Administrative burden on businesses could outweigh benefits of collecting a VAL. Conwy’s business base is dominated by SMEs particularly at micro end, with 73.7% of enterprises having 0-4 employees. We only have five businesses that exceed the 250 SME threshold. Concerns that a VAL would impose additional admin and financial burden on small / micro businesses.
10.6 Danger that a VAL could give false hope to communities as no one knows how much it would be and it’s economic impact.
10.7 Current scope which outlines what the money raised can be spent on is very broad and could result in funds raised being spent on things which are not considered to be direct tourism and community benefit. The local tourism sector should be consulted when reviewing applications for the income generated and whilst we would do this in Conwy, it should be built into the Legislation.
10.8 Strongly believe that LA’s should not have powers to implement local VAL schemes and a national scheme would avoid distorting competition in Wales. If LA’s across Wales impose VAL schemes, and others not, we could see some parts being negatively impacted by this concept. Concern that visitors could stay in a county that charges no levy and then travel across county borders in Wales as a day visitor, and impact on public goods would come from the day visitor. The best option would be to agree a national VAL scheme to avoid unfair displacement of visitors across the country.
10.9 We would argue that any exemptions to the VAL should be set on a national level. This would help to reduce conflicts between local authorities in Wales, particularly in areas where assets are shared between more than one local authority e.g. Snowdonia National Park.
10.10 Proposed 2 tier charging system divides the sector in an unfair way. Glamping sites can easily cost far more than a B&B or small Hotel. Some hotels charge many times the rate charged by smaller hotels. If a campsite or hostel pays less, why should a £70 per night B&B pay the same as a £700 per night hotel? The level of the Levy needs further discussion.
10.11 Any income from the visitor levy would need to be in addition to current funding streams already available. It should not replace current WG funding for CCBC.
The Regulatory Impact Assessment is set out in Part 2 of the Explanatory Memorandum (https://senedd.wales/media/g5ipwvwh/pri-ld16812-em-e.pdf). This includes the Welsh Government’s assessments of the financial and other impacts of the Bill and its implementation.
(We would be grateful if you could keep your answer to around 500 words).
11.1 The accommodation provider should not necessarily be made liable for the payment of the VAL. It’s common for accommodation to be let through a third party and numbers are not always strictly controlled. The term “liable” indicates that the provider has to include it in their costs and their turnover. This could have an effect on VAT, VAT liability, rateable values, insurance costs and commissions. The VAL should be extra to the cost of the accommodation and not strictly the liability of the provider; whoever collects it.
11.2 Overall, it is our view that any VAL should be easily collected by businesses to mitigate any administrative burden. There have been discussions in previous consultations around increasing business rates slightly rather than creating a new VAL and the entire administrative burden that it could bring with it. This would still be the preferred option.
11.3 As per point 1.10 above we also question the type of accommodation that would need to be considered under a VAL scheme. Primarily, campsites and caravan parks are often not the providers of accommodation but provide the land on which temporary accommodation can be erected or placed. They therefore are not technically accommodation providers, which could present some legal complexities.
11.4 A VAL cannot be charged for accommodation on local authority gypsy and traveller sites, and registered social landlord gypsy and traveller sites. It also cannot be charged for accommodation in a vehicle, or on board a vessel that is undertaking a journey involving one or more overnight stops. How will this affect workers staying in the area that are not visiting but there working?
11.5 The strategic aim for tourism in Wales is to reduce seasonality, increase spend and spread visitors further around the country. Similarly, on a local level in Conwy County, our aim is also to achieve these three things and one area which we are currently focusing on improving is our night-time economy offer. The introduction of this VAL is not necessarily aligned with improving the evening offer and our aim of converting day visitors to staying visitors. What’s more, we are aware of cases where visitors wish to stay in local hotels but they are not necessarily tourists. Theatre goers occasionally wish to stay overnight in a hotel as opposed to travelling home within the local area. However, the introduction of the VAL would effectively result in them being penalised for this, despite the fact that it would support the growth of the tourism sector and evening economy.
11.6 It is unclear from the Explanatory Memorandum what the Wales Revenue Authority (WRA) are expecting form the LA’s that opt into the Levy. Are the WRA expecting the LA to enforce the scheme and if so – where does the resource and capacity come from? Also, once the register is in place – who owns the register and whose responsibility is it to update and manage? We suggest it’s the WRA due to the current financial and resource pressures already facing local authorities. They also lack resources to be able to ensure compliance and enforcement.
(We would be grateful if you could keep your answer to around 500 words).
12.1 The Bill only targets overnight stays. This could have the unintended consequence of increasing day visitors. Conwy County receives a significant number of day visitors. According to STEAM data, in 2023 there were over 7 million day visitors in Conwy County compared with 2.68 million staying visitors. As a key theme of our new Destination Management Plan is to increase the value of visitors to the county by attracting more staying visitors, we are concerned about the effect only taxing staying visitors may have on the overall tourism economy. There is a strong feeling within the local tourism sector that day visitors should be taxed as well because they cost local authorities more in maintenance and contribute very little to the local economy.
12.2 The Bill may also unintentionally distort tourism in Wales because each local authority has the power to decide whether to charge a tourism levy or not. We strongly believe that the VAL scheme in Wales should be a national scheme. Local authorities should not have powers to implement local schemes and a national scheme would avoid distorting competition within Wales. If local authorities across Wales impose various VAL schemes, we could see some parts of the country being negatively impacted by this concept. Should this scenario come about, there is concern that visitors could opt to stay in a county that charged no tax and then travel across county borders in Wales as a day visitor, and the impact on public goods would come from the day visitor. Alternatively, they may not even choose to visit other parts of the country as a day visitor, which would harm the visitor economy even further. Therefore, the best option would be to agree a national scheme to avoid unfair displacement of visitors across the country
12.3 Additionally, if several of the 22 local authorities choose not to opt in, then how do WG propose to meet the costs of operating the levy? Figures of up to £40million are forecasted to manage the WRA for 10 years. Does that £40million then become a higher financial burden on those that have introduced the levy? Would the allocation to spend in local areas become smaller?
12.4 We should also take into consideration the fact that a lot of legislation has currently been placed directly and indirectly on the tourism sector in Wales in recent years. The 182 Day Rule on self-catered properties has negatively impacted the sector and been very poorly received. Additionally, the sector has experienced a negative impact from the introduction of the 20mph rule in Wales. Now they are being asked for their views on a VR&LS and VAL scheme and which will increase the administrative pressures on them. We are hearing more and more stories of tourism businesses who have been forced to close (fully or partly) due to the recent legislation changes. If their views are not listened to with the introduction of a VAL, we could see an increase in tourism businesses closing across the country, and a decline in the visitor economy.
(We would be grateful if you could keep your answer to around 500 words).
13.1 Without an economic impact assessment, it’s difficult to determine how much income a VAL could generate. Ultimately, the benefit and income from the levy would need to be significant in order to justify imposing a levy. The economic impact assessment will provide the key evidence in which to decide whether the introduction of a VAL would be beneficial to local areas.
13.2 The feeling amongst the Tourism sector in Conwy is still as strong as ever in that a VAL is not the right thing to impose. If the Bill is passed then the benefits to local communities and businesses have to be clear, with a minimum amount spent on administrating the Levy.
13.3 If the VAL were to create significant funds that could be spent locally, we would need to ensure local communities see the benefit from the fund. This would help communities understand how the money from the tax collected would be spent and may help to attract support for the scheme. As mentioned above, the current scope for spending the income raised from the Levy is very broad and could result in funds being absorbed by general local authority spending (roads infrastructure etc.) as opposed to improving the visitor and community infrastructure.
13.4 Another major concern for us would be whether other WG funding streams would be lost because of the income generated through a VAL. Due to the current economic climate, CCBC has a number of difficult financial challenges to overcome and the threat of losing current funding streams in replacement of a visitor levy would only add to the financial burden. Any income from the VAL would need to be in addition to the current funding streams already available.
13.5 Furthermore, the costs attached to the WRA in implementing the register is high and there are concerns that those that opt in take the brunt of it if the Levy is not introduced at scale.
13.6 It is clear from the Explanatory Memorandum that the majority of the costs to be met by local authorities will need to be met from existing budgets with a token amount mentioned towards some costs. We do not have spare capacity or budget to meet costs such as consultation and engagement, reporting, audit etc. Also, what about the cost of establishing a partnership and administrating the money that comes into the LA from the Levy to ensure that it’s spent in a fair and consistent manner along with the audit and reporting requirements for transparency? We call for a revisit to these costs, but not to the detriment of the bottom line of the Levy to be dispersed to communities.
The powers to make subordinate legislation are set out in Part 1: Chapter 5 of the Explanatory Memorandum (https://senedd.wales/media/g5ipwvwh/pri-ld16812-em-e.pdf).
The Welsh Government has also set out its statement of policy intent for subordinate legislation (https://business.senedd.wales/documents/s155951/Statement%20of%20Policy%20Intent.pdf).
(We would be grateful if you could keep your answer to around 500 words).
14.1 The legislation allows for Ministers to remove business types from the levy. We believe this needs to be handled sensitively as any decision would need to be justified thoroughly. The alternative is that we risk the sector thinking we won’t collect from those businesses perceived to be too difficult to collect from, or those who are perceived to have the greatest lobby force to gain exemption from the levy. This will lead to resentment in the industry.
(We would be grateful if you could keep your answer to around 500 words).
15.1 There are a lot of questions still being raised around key points within the Bill. At this stage, we feel there should be more answers and information available to local authorities and the sector to enable us to better understand the rationale behind the scheme and how it is intended to operate. The lack of an economic impact assessment or any report with supporting evidence to justify why a Levy is needed in the format that is being proposed only seeks to highlight the uncertainty around key points in the bill further. At the moment, the rationale behind the scheme has been based on incomplete assessments of existing taxations faced by Wales and the example locations quoted. A slower approach with supporting evidence, further consultation and a roadmap clearly detailing exactly how the scheme will operate would have been beneficial to secure buy-in from the sector. The lack of information makes the process and legislation seem somewhat rushed.
(We would be grateful if you could keep your answer to around 500 words).
16.1 The proposal is that a visitor accommodation provider (“VAP”) that has failed to comply with the Visitor Registration and Licensing Scheme (VR&LS) then a £300 per premises and £300 per premises and subsequently £60 per day for each day on which the failure continues after 30 days will apply. This appears reasonable as the £300 will hopefully be enough of a deterrent from not registering.
16.2 We urge that any VR&LS is a simple electronic version. The register needs to be cheap and simple to use and comprehensive in its scope. If all providers need to register, that is all that is needed. They can file their information on-line to be accessed by all relevant, government agencies. There is no need for a Licensing Authority.
(We would be grateful if you could keep your answer to around 500 words).
17.1 Conwy County receives a significant number of day visitors. According to STEAM data, in 2023 there were over 7 million day visitors in Conwy County compared with 2.68 million staying visitors. As a key theme of our new Destination Management Plan is to increase the value of visitors to the county by attracting more staying visitors, we feel there should be an option to tax day visitors and not just overnight visitors.
17.2 We appreciate that taxing day visitors is not simple and there are few examples of this globally. However, one possibility could be through the introduction of a day visitor levy imposed on car parking charges. We would propose that residents could access a car parking pass which would excuse them from paying any visitor levy. All other visitors would therefore pay increased amounts for car parking and a tourism levy could be collected from the parking tickets. This way, we will also be targeting those day visitors that do not contribute to the local economy because they are self–sufficient. For example, many day visitors in the area tend to drive here to spend a day at the beach and bring their own food and refreshments with them instead of spending in local cafes and restaurants. By imposing a day visitor levy on car parking charges as opposed to another area of the visitor economy such as attractions, then we will be ensuring that all day visitors to the area are paying the visitor levy and not avoiding it.
17.3 Retaining young people to live and work in the tourism sector is a vital component of ensuring the future resilience and vibrancy of our communities, local economies and Welsh Language. This proposal might very well undermine Welsh Government’s ambition to see the number of people able to enjoy speaking and using Welsh reach a million by 2050. In the 2021 Census an estimated 538,000 usual residents in Wales aged three years and over (17.8%) reported being able to speak Welsh, which is a decrease since 2011 (562,000, 19.0%). We call for a robust language impact assessment as part of the planning to ensure that whatever is proposed and taken forward has a positive impact on our Welsh Language and thus adhering to the Well Being of Future Generations Act goal of “a Wales of vibrant culture and thriving Welsh Language”.
17.4 Tourism businesses are very much still recovering from the adverse effects of the Covid-19 pandemic and subsequent lockdowns that were imposed. This, together with the other legislation that has been implemented recently, means that the sector face further challenges when they have not fully recovered from the global pandemic. We therefore believe it is important to act on views from the sector when introducing the Levy to prevent a further decline in tourism across Wales.