Thousands of travel and tourism jobs in Wales could be affected by recent regulations on holiday lets, industry stakeholders have warned, due to the chilling effect of business tax rules on tourist bed capacity.
Brought online in 2023, the rules state that self-catering accommodation in Wales must be available for short-stay lets for over 252 nights per year to qualify for business rates that are more favourable than residential council taxes. What’s more, availability is not the only factor: they must also be successfully let out for at least 182 nights. If not, they are categorised as “second homes” and taxed as such.
That is a stricter regime than the one in place in England, where properties qualify for business rates if they are available for a minimum of 140 nights, and let out for at least half that.
Welsh authorities say the Land of the Dragon’s tighter rules are to safeguard rental prices and ensure locals have “a right to a decent, affordable home to buy or to rent that allows them to live and work locally.”
But travel and tourism business representatives have sounded alarm bells over the impact of the business rate rules on bed capacity in popular parts of the country. The highly seasonal nature of tourism in Wales means that property owners are finding it difficult to meet the threshold because of a drop in bookings over the quieter months.
The ironic thing about Labour and Plaid’s tourism tax is it won’t just be paid by tourists.
— Andrew RT Davies (@AndrewRTDavies) March 9, 2025
Everyone in Wales who visits attractions will have to pay.
A very good point by the Wales Tourism Alliance. pic.twitter.com/NuWXqtKW8G
With those holiday homeowners then unable to claim business rates for their properties, Nicky Williamson, of the Welsh Professional Association of Self Caterers (PASC) told the BBC the “bed stock” is diminishing, meaning that in the busier months “we don’t have the facilities for tourists to stay.”
The result could be a hike in unemployment to the tune of thousands, Williamson says, as “then the number of people that are employed in tourism, they will start to lose jobs” and other hospitality venues such as pubs and cafes are “not going to survive”. Another scenario sees big businesses replacing small business owners.
Labour’s Tourism Tax will hurt Wales, costing jobs, damaging the economy, and hitting people’s pockets.
— Reform UK Wales (@RUKWales) February 17, 2025
Wales needs Reform. 🏴 pic.twitter.com/tBpj5T0wGg
The “brutal” rules are also negatively affecting workers’ and business owners’ mental health and wellbeing, she said, following a PASC survey that found 94% of self-catering operators are concerned about the quotas and 60% fearful they would not reach the required numbers in 2025 to meet the threshold this year.
Responding to The Independent, the Welsh government said the rules ensure holiday businesses make “a fair contribution” by balancing business owners needs “with the needs of our communities, as everybody has a right to a decent, affordable home to buy or to rent that allows them to live and work locally. Our package of measures to tackle the impact of second homes and holiday lets helps ensure owners are making a fair contribution in areas where they have homes or run businesses.”
