Airbnb says it is backing tourist tax plans in Wales – sparking a backlash from local industry leaders who accused them of being ‘disconnected’.
Prime Minister Mark Drakeford has included a proposal to allow local authorities to introduce a visitor tax – most often imposed on nights spent in hotels, B & Bs or independent vacation rentals – in his program for the government.
Consultations will be ongoing on the new tax with Mr Drakeford saying similar levies have been used in other global holiday destinations.
READ MORE: Mark Drakeford ‘repeats’ advice on travel to and from UK Covid hotspots
But the Wales Tourism Alliance (WTA) has reacted categorically to the proposal, pointing out that tourism operators already pay much higher VAT rates in the UK than most other European companies in the same industry.
Mr. Drakeford has, however, found an ally in the American vacation rental platform Airbnb.
A spokesperson said: “We are supporting the tourist tax plans in Wales and we welcome the opportunity to work with the Welsh leaders to make it a success, as we have already done by helping to generate nearly Â£ 2.5 billion in tax revenue in approximately 30,000 jurisdictions around the world. “
They added: “We look forward to working with the Welsh government on the details of the proposals and sharing our experience of signing over 1,000 regulatory and tax agreements around the world.”
But Jim Jones of North Wales Tourism said they were “obviously very out of touch with the tourism and hospitality industry” in Wales.
Airbnb has already been criticized in Wales – a Cymru Cllr Plaid declaring they were “a bane to our communities” because local homes were being turned into vacation properties.
WTA Chairman Andrew Campbell called the timing of the Welsh government’s tax proposal insensitive and said it showed a lack of respect for the tourism industry in Wales amid a crisis of recruitment hinders recovery from Covid-19 pandemic.
âThe feeling around the table was ‘No way’,â he said.
âNot only will this make the industry less competitive, giving the impression that Wales will be a more expensive destination to visit, but businesses are already struggling to bounce back financially from the pandemic.
âThe businesses may have reopened, but now they have to pay all the bills that were pushed back. VAT will return to normal in September, holidays end and loans must be repaid.
âRather than proposing a new tax, the Welsh government should focus on providing financial support to help the sector.
âThe Prime Minister underlined that the tourist tax has been successfully introduced in many destinations around the world. That may be true, but many of these destinations don’t have to deal with 20% VAT rates.
âThe average VAT rate in euro-zone countries, for example, is 10%. The tax burden imposed on our businesses is already high.
Mr Campbell said the implementation of such a tax would also affect supply chains and disproportionately impact low-income groups who already struggle to afford a holiday in Wales
âThe Welsh government will consult with the industry, but the answer will be ‘No’ to the tax. Charging visitors more is not the solution to the problems associated with visitor management. A more sustainable approach is needed, based on better planning and greater dialogue with local communities.