Serving Wales: a manifesto for growth

Our sector employs 165,000 people – making it the second largest employer in Wales and responsible for 11% of jobs.

We represent 5% of the economy, generating £5 billion in economic activity and delivering £1.5 billion in tax receipts for the Welsh economy.

Business rates are calculated using rateable value, based primarily on property values rather than ability to pay or profitability. Businesses that must trade in-person, in-community, and within bricks-and-mortar buildings (as opposed to online, for instance) have borne a disproportionate and growing share of the overall business rates burden.

This has led to hospitality paying 10% of the rates bill, despite representing just 3% of contributing turnover. This imbalance places sustained pressure on business viability, investment and the long-term future of high streets and community assets.

Until now, businesses were protected by UKHospitality Cymru’s participation in negotiating annual post-Covid reliefs of up to 75% to cover the imbalances. This piecemeal help, while invaluable, prevents competent mid-term business planning, holds back investment and props up a no longer fit-for-purpose system.

The recent revaluations, combined with the ending of reliefs for hospitality, will lead to a unsustainable increase in rates bills for 2026/27 and beyond; one that has the potential to decimate high streets and local communities.

A permanently reduced business rates multiplier for hospitality and leisure sectors at a rate of 30 pence in the pound, funded by rebalancing the burden to reflect the rise of the online economy. Alongside this, review and amend the valuation methodology used for hospitality premises, ensuring it reflects Welsh trading conditions, seasonal patterns and regional variation.

Hospitality is a crucial provider of first jobs, early-stage careers, and routes back into work, or people returning after retirement or periods of economic inactivity. Yet deep rooted misconceptions still exist about working in hospitality in the eyes of the public, parents, teachers and even in parts of government.

We have made good gains in recent years but further action is required to realise the potential of one Wales’s core industries, strengthen long-term workforce sustainability and provide a greater range of high-quality career options for young people across Wales.

Post-school connectivity around skills provision has been dramatically enhanced since UKHospitality Cymru instigated the Wales Hospitality and Tourism Skills Partnership eight years ago. The Partnership is industry-led, bringing together all parties with an interest in the skills agenda, with the Secretariat provided by Visit Wales.

To date, the partnership has delivered successful Welsh Government-funded recruitment campaigns, increasing candidate volumes while challenging outdated perceptions of hospitality careers.

This model provides a blueprint for deeper partnership working in the next Senedd five-year term, supporting both workforce growth and skills development.

The UKHospitality Cymru-led Hospitality and Tourism Skills Partnership would benefit from additional, dedicated resourcing to extend its reach and impact. A sector-specific funding would support joint activity to attract, train and retain our people, while reinforcing hospitality’s role as Wales’s leading employer of young people.

Apprenticeships and in-house support for our workforce are also deeply important to in hospitality. The sector currently recruits around 725 new apprentices each year and provides training to over 100,000 people annually through all routes.

However, apprenticeship support for hospitality and tourism, particularly at higher education level, does not share the same support as other industrial sectors. More could be done to help attract young people into the industry if similar funding were available, building upon the success of initiatives such as the Hospitality Skills Passport (entry level qualification) which has proven effective in supporting people back into work. The Welsh Government should work with businesses to ensure Apprenticeship Levy funds are allocated to support hospitality. This includes reinstating funding for the Flexible Workforce Development Fund.

UKHospitality is also working with Springboard and DWP on a pilot to deliver an essential foundational skills training module for new starters in England and Wales. The success of that pilot and the resulting sector-based work academies demonstrates the value of an employer-led, modular approach. The next Welsh Government should work with UKHospitality Cymru to implement a similar scheme in Wales.

Finally, targeted government support is needed to improve productivity, including helping hospitality businesses understand, adopt and implement AI and digital tools in practical, accessible ways.

As a major user of energy and food, the sector has an important role to play in achieving Wales net zero and environmental ambitions.

However, while businesses are committed to improving sustainability, the cost of investment required to decarbonise operations is often prohibitive, particularly for small and medium-sized enterprises operating on tight margins.

Without targeted support, the pace of transition risks being slower than required – despite strong willingness from the sector to act.

There is also a need to ensure that sustainability policy reflects the operational realities of hospitality, rather than applying one-size-fits-all approaches that can increase costs without delivering proportionate environmental benefit.

The Welsh Government should support hospitality businesses to transition to net zero by incentivising investment in green energy and decarbonisation. Our businesses would welcome particular support to make heat in buildings more efficient and to reduce food and packaging waste.

The Welsh Government should work with hospitality and tourism industry partners to develop a Regenerative Tourism Strategy that supports destinations to manage visitor growth sustainably, protect community wellbeing, and maximise long-term economic value, particularly in areas experiencing seasonal or infrastructure pressures.

The Food 7 Cymru network, bringing together seven farm-to-fork trade associations, provides an incoming Government a ready-made mechanism for coordinated engagement on food, farming and hospitality policy. Indeed, the effectiveness of how this group has worked together could be mirrored within government, as it is important that pan-industry matters do not fall between departmental boundaries and that businesses can maximise the impact of available support.

Hospitality is a pan-Wales, place-based industry that depends on effective transport, digital connectivity and coordinated policymaking.

Current infrastructure constraints, including road congestion, limited rail capacity to parts of Wales, and fragmented planning and policy decisions restrict growth, visitor dispersal and local regeneration.

At the same time, hospitality’s farm-to-fork supply chain spans multiple government departments, yet policy and support mechanisms are often disconnected, reducing their overall effectiveness.

The next Welsh Government should adopt a coordinated, place-based approach to infrastructure and connectivity that supports sustainable growth and regeneration.

This should include:

Transport and roads

• Re-evaluating transport policy to ensure road investment reflects economic and visitor pressures as well as environmental objectives, including addressing chronic congestion on the M4 corridor, which acts as a critical gateway into south Wales and a major constraint on economic activity, visitor flows and supply chains. This should include a re-evaluation of current policy on strategic road capacity, considering a range of evidence-based options, including targeted upgrades, demand management and, where appropriate, new infrastructure solutions, alongside environmental objectives.

Rail connectivity

• Working with rail operators and UK Government partners to increase capacity, reliability and services to west and north Wales. This should build on demonstrated demand for Great Western Railway services to Carmarthen and Pembroke Dock, and explore opportunities for additional services to Milford Haven and Fishguard.

Public transport integration

• Accelerating delivery of the South East Wales Metro, improving integration between rail and bus services, and promoting the combined network more effectively to visitors to support visitor dispersal.

Air connectivity

• Supporting the growth of Cardiff Wales Airport through targeted route development and improved inbound and outbound connectivity, aligned with tourism and trade priorities, to increase international visitor access to Wales.

Planning and high streets

• Reforming the planning system to place hospitality-led regeneration at the heart of town centre and high-street strategies, supported by faster, more proportionate planning processes for hospitality and leisure developments.

Joined-up government and supply chains

• Strengthening structured engagement between Welsh Government departments and industry supply-chain networks such as Food 7 Cymru, to improve policy coherence across food, farming, hospitality, transport and skills.

Together, these actions would improve connectivity, unlock investment and ensure the benefits of growth are shared across urban, rural and coastal communities.

During the previous Senedd term, hospitality and tourism businesses were subject to a high volume of new and proposed legislation, much of which increased costs or regulatory complexity. These included, but were not limited to, measures such as the complex visitor levy legislation; the Wales-only Deposit Return Scheme; restrictions on the promotion of high fat, salt and sugar foods; and a wide-ranging consultation on restricting alcohol advertising and promotion.

Taken together, these measures have created cumulative cost, uncertainty and regulatory pressure for a sector made up predominantly of small and medium-sized businesses. There is currently no single, formal mechanism to assess the combined impact of these policies on the visitor economy, or to ensure hospitality and tourism are fully involved in shaping decisions that affect their long-term viability.

The next Welsh Government should commission a Tourism and Hospitality Governmental Review early in the Senedd term.

The Review should:

• assess the cumulative impact of regulation and taxation on hospitality and tourism businesses,
• identify opportunities to reduce barriers to profitability and resilience, and
• consider how policy can better support sustainable growth, investment and job creation across the visitor economy.

Its findings should inform the development of a New Deal for the Visitor Economy, setting out a clear, long-term framework for hospitality and tourism policy in Wales.

To support this, the Welsh Government should establish a formal, structured mechanism for engagement with UKHospitality Cymru and industry representatives, ensuring early involvement in policy design, and better alignment between policy intent and delivery.