A major UK city is set to introduce a new visitor levy for overnight stays after the city’s full council approved the scheme. The decision follows a public consultation in which 62% of respondents expressed support. The levy will come into effect from April 2027 in Cardiff. This follows new Welsh legislation that received Royal Assent in September 2025 which allows councils across Wales to charge a small fee to overnight visitors.

Almost 2,000 responses were received from the public consultation. Of those, 62% supported the proposal, 33% opposed it, and 5% were neutral. Those who support the visitor levy highlighted that similar tourist taxes already exist in other European cities and beyond, arguing that the revenue could fund improvements to tourism infrastructure and help manage the effects of large-scale events.

Not everyone, however, supported the scheme with some raising concerns about the potential impact the levy could have on the city, including the effect on visitor numbers, additional pressure on accommodation providers, and over how the money would be spent.

Federation of Small Businesses Wales chief Joshua Miles previously said about the levy: “FSB has been and remains of the view that this is not the time to introduce a new tax on tourism in Wales, and that there is a risk of damage done to local economies by its implementation.

“The small business sector has experienced a prolonged period of difficult economic conditions. With low consumer spending and disproportionately high costs still affecting some tourism businesses’ viability, they still need support to recover.”

Under the approved scheme, the levy will apply to overnight stays of up to 31 nights in hotels, hostels, guesthouses, Airbnb rentals, campsites, and temporary event accommodation. The rates are £1.30 per person, per night for most accommodation types and 75p per person, per night for campsites and shared rooms such as hostels.

The levy will be subject to VAT where applicable. Exemptions include children under 18 staying in hostels or campsites, stays longer than 31 nights, and people staying in emergency or temporary accommodation arranged by the council.

The council estimates the levy could raise around £3.5million each tear. Funds will be collected by the Welsh Revenue Authority and transferred to Cardiff Council.

A new Visitor Levy Partnership Forum will be created to advise on how the money is spent, focusing on boosting tourism, promoting the city, and improving visitor infrastructure.

Cardiff Council has pledged to work closely with tourism businesses ahead of the scheme’s introduction in April 2027, and a formal agreement will also be made with UKHospitality to ensure the funds support the local tourism sector and enhance the city’s appeal to visitors.

Councillor Russell Goodway, Cabinet Member for Investment and Development at Cardiff Council, said: “The responses to the consultation on the proposed Visitor Levy are very helpful, as they clearly set out what businesses and residents want us to focus on.

“A Memorandum of Understanding will now be agreed and signed between Cardiff Council and UKHospitality and a Visitor Levy Partnership Forum will be set up to advise on how the funds are used and help shape Cardiff’s tourism strategy. This income will bring additionality to the services and promotions we can provide, improving the experience for visitors and residents alike.

“The charge, set out in legislation, is significantly lower than the typical charge seen across Europe.”

Rebecca Godfrey, Chief Executive of the Welsh Revenue Authority, said: “The Welsh Revenue Authority will collect the Visitor Levy on behalf of Cardiff Council, and we’re committed to making that process as straightforward as possible.

“We’ve published a step-by-step guide on GOV.WALES to help visitor accommodation providers in Cardiff understand whether the levy applies to them, how to calculate what they owe, and how to file their return. We’ll publish more detailed guidance in April.

“Six months from now, providers with visitor accommodation in Cardiff will need to account for the Visitor Levy on new bookings and changes to existing bookings, for overnight stays from 1 April 2027. Now is the time to start preparing, and we’re here to help every step of the way.”