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Proposed Welsh tourism tax could impact UK domestic travel recovery, says GlobalData

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According to a GlobalData Q3 2021 Global Consumer Survey, 48% of UK respondents said affordability was the leading influencing factor for booking holidays.

With Wales proposing the introduction of a tourism tax in autumn 2022 (consultation launched), possibly causing travelers to boycott Welsh holidays, this has the potential to disrupt the overall post-pandemic recovery of the UK’s travel industry, found GlobalData, a leading data and analytics company.

Craig Bradley, Travel & Tourism Analyst at GlobalData, comments: “The proposal for a tourism tax seems a little of out sync with what’s going on in the UK travel industry, particularly in the staycation market, given the current economic situation and ongoing issues with the pandemic. The tourism industry is showing positive signs of recovery and the local businesses in Wales have worked hard to attract tourists throughout 2021.”

According to a GlobalData Q3 2021 Global Consumer Survey, 48% of UK respondents said affordability was the leading influencing factor for booking holidays. This sentiment is likely to grow in 2022 due to the increased living costs and the current energy crisis gripping households across Britain. A recent GlobalData poll* from January 2022 revealed that 43.2% of UK respondents said they would consider taking a domestic trip this year. However, the tourist tax levy in Wales could now force tourists to travel elsewhere due to increased costs.

Bradley continues: “If the tax levy does go ahead, initial projections for Welsh domestic tourism figures could fall. GlobalData projects that domestic trips to Wales were expected to reach 12.6 million this year, exceeding pre-pandemic levels. However, those figures could be under threat.”

While the tourist tax will avoid the summer peak, which will be a relief for many tourists, October and November are still popular months for domestic trips. In 2019, November was the third most popular month for domestic travel in the UK, followed by October in sixth position. This is motivated by the lower cost of travel which has proven to be popular with many British travelers. Unfortunately, families with children are most likely to be affected, as the tourist tax is often applied on a per-guest basis.

Bradley concludes: “Introducing a tourist tax in 2022 seems to be counter-productive, especially with growing concerns surrounding increased living costs and the need for UK tourism to recover as quickly as possible.”

A Welsh Government spokesperson said: “Visitor levies are common place across the world, with revenues used to the benefit of local communities, tourists and businesses. We will take all views on board as part of the consultation process this Autumn. The careful process of developing proposals for a levy, translating them into legislation, and then into delivery and implementation spans years, and will be subject to approval by the Senedd.”

 

*GlobalData Poll, Closed January 2022 – 347 UK respondents 

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