Tourists shelter from heavy rain at the James Pringle Weavers store in Llanfair PG(Image: Ian Cooper/North Wales Live)
A Visitor Levy on Anglesey is likely to have relatively small economic impacts on the island’s economy, a study has concluded. In most scenarios, however, jobs will be lost and the economy will shrink.
Anglesey Council is due to consult the public this summer before deciding whether to implement the levy, dubbed a “tourist tax”. In this, the local authority is required to set out all the pros and cons, including economic impacts.
From April 1, 2027, tourists could be charged up to £1.30 per person per night. Stays at campsites and hostels would incur a lower nightly charge of 75p. In many cases, VAT will be added, hiking the levy to £1.56 and 90p.
Given the need for consultations, levies are likely to be charged from autumn 2027, if adopted. Gwynedd and Conwy are also consulting this summer and have similar timelines.
If the council green-lights the tax on Anglesey, a Levy Partnership Forum will be established to allocate the revenue. As well as spending it on things like toilets, footpaths and visitor centres, the intention is to parcel some off for street cleaning, waste collection and conservation. The latter are seen to be costs “associated with hosting visitors”.
Most studies suggests visitor numbers will decline slightly if the levy is charged, especially among less affluent tourists. Anglesey’s visitor profile differs from other parts of Wales: the island’s tourists tend to be older than the Welsh average and nearly all are white (98-99% compared an all-Wales average of 80%). Of other ethnicities that visit Anglesey, most are Chinese, according to a council equality impact assessment.
Ensure our latest news and sport headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings
It’s estimated the visitor levy will add 1.1%-2.3% to trip costs. As a result, a -0.74 “elasticity” is assumed – this indicates how many people will be put off coming. Anglesey Council therefore calculates an annual £1.3m reduction in spending by visitors.
The council stressed this is probably an overestimate. “Not all of that spend would have been spent in Anglesey – some would have been spent in other local authorities either on day trips or on the journey,” said its report.
“It should also be noted that elasticity of demand in Anglesey will be affected to some extent by whether neighbouring local authorities also introduce the visitor levy. If Anglesey is the only local authority to introduce the levy, the impact on visitor behaviour is likely to be higher, as visitors may choose to go to Gwynedd or Conwy instead. If more local authorities introduce a charge, the impact is likely to be lower.”
According to the Great British Tourism Survey, there were 0.28m domestic overnight visitors to Anglesey per year. They spend an average of four nights and spend £305 per person per trip. The figures “suggest that Anglesey has higher occupancy rates than neighbouring local authorities (Gwynedd or Conwy),” said the council.
Overall economic impacts will depend on whether Anglesey’s accommodation providers choose to absorb the levy themselves. If they do, the sector’s collective bill will rise by up to £1.96m, prompting a total fall in economic activity of £2.6m. More likely, most if not all of the levy, will be passed on to visitors, in which case local repercussions will be much lower.
Off-setting the losses will be a predicted £1.6m of extra spending on Anglesey as a result of levy income. Not all this will be spent within Anglesey: some contracts may go to firms outside the county. However there is expected to be a social and cultural dividend.
All local authorities are basing their assessments on best guesses, as little data exists to underpin accurate forecasts. They’re also having to produce a range of projections depending on how visitors react to the extra costs.
Pulling all these together, Anglesey Council has forecast the following net impacts: Get the best island stories from our Anglesey newsletter – sent every Friday
Anglesey Council said: “Despite the caveats associated with the evidence base and methodology, we are confident that the impact on the Anglesey will be relatively small in terms of both the impact on employment and annual GVA (Gross Value Added).”
