4 days ago
Labour's endless red tape is killing off the Welsh holiday
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After a 37-year career in the Royal Navy, Ian Pattinson is tougher than most. But there's one thing that keeps the former captain awake at night and it's nothing to do with his military service – it's his Welsh holiday home.
'Every single day I worry about whether I'm going to make 182,' he says. Pattinson is referring to the number of days his two cottages have to be let each year to qualify for business rates following a change by the Welsh government two years ago.
If he fails to hit the target, the properties will be subject to council tax leaving Pattinson with a £2,000 bill. For some Welsh holiday let owners, the bill can come close to £10,000 because their properties are subject to paying a 200pc second home premium.
The 182-night rule is just one of a raft of measures brought in by the Welsh government in the past five years that has seen overnight tourist numbers plummet and holiday let owners exit the business.
The Professional Association of Self-Caterers (Pasc) has identified 17 government interventions from both the Senedd and Westminster that it says are negatively impacting the sector in Wales.
Pattinson, 66, moved to the outskirts of Newport in Pembrokeshire with his wife 10 years ago so the two could enjoy a comfortable retirement. The stone cottages are nestled against the slopes of the ancient Preseli Mountains, in the heart of Pembrokeshire Coast National Park.
'For 10 years, we were living the dream. It was excellent. We only had to hit 70 days a year [to qualify for business rates] which we could easily manage. My wife and I both made £7,500 each per cottage and it helped boost our retirement income.
'But the onslaught of policies flooding through the industry at the moment is unbelievable.'
On top of a daily worry about whether he'll be landed with a council tax bill, he expects it will cost him £15,000 to upgrade the former farm building to achieve an Energy Performance Certificate (EPC) rating of C, thanks to Ed Miliband's net zero drive.
It all comes as the Welsh government has given the green light for councils to pass an overnight visitor levy, which will leave a family of four spending an extra £72.80 in tax for a two-week stay.
Fewer families and shorter stays
The problem is fewer families are going on holiday in Wales and those that do aren't staying for long.
Of the nearly 70 million people who visit Wales each year, around 90pc are day trips. Since 2022, there has been a 29pc decline in overnight stays, according to data from the Welsh government. Holiday spending is also down by 10pc in the same period.
Although Pattinson has in recent years managed to reach the 182-night benchmark, he says the stress of the job and the diminishing returns means he will have to give up one of the cottages.
'We are able to make between 185 and 190 days, but what that means is I can never take my eye off the ball. I can never sit back and relax. My accountant tells me each one of those cottages provides £35,000 spin-off benefits to the local economy. Now I've shut one of them down, that's £35,000 gone straight away. If you multiply that out over what's happening in the rest of Wales, that number starts to build up.'
It appears Pattinson's thesis is correct. Although the number of holiday let owners exiting the market is difficult to measure, the Welsh government's recent survey of tourism businesses found 39pc said they had fewer visitors in the last year compared with a year earlier.
Tourism provides one in 10 jobs in Wales, contributing £3.8bn to the economy each year.
According to Pasc, there are around 22,000 self-catering businesses in Wales. A recent survey of Welsh members found that almost half (47pc) of properties that pay council tax because they don't meet the 182-day requirement were operating at a loss.
Pattinson believes the biggest mistake the Welsh government has made is to take a one-size-fits-all all approach to its policies. 'It's lazy policy-making. If I lived in Newport or Tenby, I probably wouldn't have to get out of bed to make 182 days, but I'm only four miles out of Newport and the numbers fall off almost like a cliff when you are not in those hotspots.'
'It's harming the Welsh economy'
Julian Barnes, a retired glass manufacturer from Bodfari in Denbighshire, north Wales, is far away from the traditional tourism hotspots. 'The best we've ever managed was 127 days in the year after Covid.' He says the idea that his end-of-terrace cottage in the rural village home to 500 people will be let for 182 nights is a fantasy.
'They want to introduce a visitor levy, an EPC requirement, there's registration, employment rights, statutory licencing – a whole pile of things that are growing to make it more and more difficult to run what was a simple business that brought in a lot of trade to the village.'
It means Barnes has resigned himself to paying double council tax on the property, which recently rose to a 150pc premium in April. 'The total bill is £4,956 for 42 sq m. The council tax premium for us means we are paying £118 a sq m in tax.'
He says last year the cottage brought in £10,000 in revenue which left him and his wife, a retired midwife, with a £3,000 profit. This year, he expects they'll be lucky if they end up with £2,000 after their fixed costs rose by 25pc.
He adds: 'That assumes we do all the cleaning, gardening and maintenance for free. We take at least five hours to turn the cottage around. If it was paid per hour, it would be around £1 an hour – you can forget your minimum wage. The Government talks about working people, well we are working people except we are working for basically nothing.'
Barnes and his wife are planning to sell the cottage. He says: 'There are groups of us all over the country in dire straits with these businesses and it's harming the Welsh economy.
'One of the big attractions of our cottage is you can walk to the village pub. We reckon we bring about £10,000 worth of business to the pub each year. There are four of us in the village who have holiday lets. If we go, that's an awful lot of money for a rural business to lose.'
'I am absolutely trapped'
But while some holiday let owners are deciding to get out, others who rely on it as their main source of income feel trapped.
Nicki Robinson, 61, a former cattle farmer from Carmarthenshire, turned her old dairy into a holiday cottage in 2006 after her farming business was no longer financially viable.
Almost 20 years later, she can see the same process happening again as her holiday let business struggles to stay afloat. 'I am absolutely trapped.
'If I don't achieve 182 days, the daft thing is you are not earning as much but you've then got to suddenly find an extra £3,000 to pay council tax.
'It's not because you are not trying. The cottages are up 365 days a year but we just can't achieve that level of occupancy because we are not near beaches, castles or other tourist attractions. It's simply clean accommodation with a rural outlook.'
Robinson says it's not just government policy that has harmed the industry. 'When I started, I got so many of my bookings direct through the tourism office and I would have families come and stay for up to 10 days at a time.
'Now bookings come through online sites that take 25pc of the revenue and the stays are so much shorter. I recently had a run of stays where I did five changeovers in seven days.
'Rather than getting families, we are seen as an alternative to a budget hotel. Bookings come in at the last minute and people want to stay for one or two nights.
'In effect, I am working every day of the year for a job that pays less than minimum wage.'
The Welsh government has said its policies against holiday let owners are designed to help local people get on the housing ladder but Robinson says this is completely misguided.
'I've got a 26-year-old son who is desperately trying to get on the property ladder. But you don't fix the lack of affordable social housing by trying to destroy the livelihoods of those who rely on tourism.'
