A proposed visitor levy in Cardiff is a “significant opportunity” for a sector facing long-term challenges, the city's Business Improvement District says.
FOR Cardiff has submitted its response to Cardiff Council’s Visitor Levy consultation and is encouraging businesses to respond before the deadline of February 23.
Cardiff welcomes more than 20 million people a year who spend more than £1.6 billion. It also accommodates almost 5 million staying visitor days.
The council is proposing to introduce the levy from 1 April 2027 to cover the local authority area. The levy would apply to paid overnight stays of 31 nights or less in hotels, hostels, guesthouses, Airbnbs, campsites, and temporary event accommodation.
FOR Cardiff, which represents more than 800 city centre businesses and reinvests £1.4 million each year into strengthening the city centre, said it sees “significant potential” in the proposed levy, if it is implemented “well, transparently, and in partnership with the city’s tourism and business community”.
It said that it recognised that views across the sector remain mixed. However, it added that with conservative estimates suggesting the levy could generate around £3.5 million per year for Cardiff, ring-fenced for visitor economy priorities, this represented a significant opportunity for a sector that has faced long-term funding challenges. To secure business confidence, it is vital that this opportunity is capitalised on properly, transparently, and with meaningful industry involvement, it added.
Carolyn Brownell, Executive Director at FOR Cardiff said:
“The proposed visitor levy represents a significant opportunity for Cardiff's visitor economy. However, its success will depend on how it is implemented. Ensuring additionality, transparency and genuine collaboration with industry is critical, and we strongly encourage businesses to respond to the consultation so their views will help to shape the future of the levy.”
In its response to the consultation FOR Cardiff welcomed the overall vision and the intention to retain funds for tourism-related purposes, and emphasised several key points:
- Additionality is essential: levy funding must not replace or reduce existing public funding streams for the city.
- Investment should prioritise visitors and a welcoming city environment, rather than discouraging visitors.
- Year-round trade must be a focus: Cardiff should move beyond “feast and famine” tourism driven by major events, with greater emphasis on growing the business events market to support mid-week stays.
- Clear priorities for spend: the organisation said it strongly supports investment in place promotion, visitor infrastructure and services, clean and safe place management, and destination management.
- Avoid funding gaps in core services: Using levy income to cover shortfalls in existing non-tourism services risks undermining the spirit of the levy and business confidence.
- Strong industry governance: The proposed Visitor Levy Partnership Forum is welcome, but it must be genuinely influential, with industry expertise taken seriously alongside democratic decision-making.
- Transparency and reporting: Proactive, accessible and detailed reporting will be critical to building trust with businesses, visitors and the public.
- VAT clarity: The likely impact of VAT on the levy should be communicated clearly so that the true cost to visitors is understood from the outset.
FOR Cardiff added that it has long experience operating a levy-funded model, and knows that transparency, accountability and clear outcomes are essential to maintaining business support. The visitor levy represents an “important and innovative new funding mechanism for Wales”, it said, adding that it must be delivered in a way that strengthens partnership working and delivers real benefits for Cardiff.
