Pembrokeshire hotels and restaurants at risk due to business rates changes

A Senedd Member for Pembrokeshire has warned that the Welsh Government's proposed business rates changes risk leaving established hotels, restaurants and tourism businesses at a financial disadvantage, despite their importance to the West Wales economy.

Welsh Conservatives Senedd Member for Ceredigion Penfro Paul Davies has challenged the Plaid Cymru Welsh Government over plans to introduce a lower business rates multiplier for eligible hospitality, tourism and leisure premises from April 2027, while excluding properties with a rateable value of £51,000 or more.

The concerns follow three Written Questions tabled by Mr Davies, which revealed that 1,162 properties across Wales fall above the threshold, including 59 in Pembrokeshire and 24 in Ceredigion.

While smaller eligible premises will benefit from a permanent reduction in their business rates multiplier, larger properties will miss out, regardless of the financial pressures they face or the number of people they employ.

Mr Davies said the approach risked creating an unfair divide within an industry already struggling with rising operating costs, business rates and increasing employment costs.

He remarked: "Tourism and hospitality are the backbone of our local economy, supporting thousands of jobs and bringing vital income into communities across Pembrokeshire and Ceredigion.

“While I welcome any measures that reduce costs for businesses, I am concerned that the Welsh Government's approach risks leaving some of our most established tourism and hospitality businesses behind.

"A hotel's rateable value doesn't tell you how profitable it is, how many people it employs or how much it contributes to the local economy. Many of these businesses are already facing significant pressures from rising energy costs, staffing and other overheads.

“Excluding them from a permanent rates reduction simply because their premises exceed £51,000 could make an already difficult trading environment even harder.

"These are often the businesses providing year-round employment, supporting local suppliers and investing in the facilities that attract visitors to West Wales. We should be encouraging that investment, not putting further obstacles in their way."

In response to Mr Davies' questions, the Welsh Government confirmed that qualifying food and drink hospitality businesses can claim 15% rates relief during 2026–27, including those above the £51,000 threshold.

However, it has not confirmed what additional support, if any, will be available to these businesses from April 2027, stating that future arrangements will be determined through the budget process.

The Government also referred to its published impact assessments but did not provide a specific assessment of the financial consequences for tourism and hospitality businesses excluded from the lower multiplier.

Mr Davies added: "The Welsh Government has been able to tell me how many properties will miss out, but it has not provided a clear picture of what this decision will mean for those businesses, their employees or the communities that depend on them. That is simply not good enough.”

"I want ministers to look again at the £51,000 threshold, properly assess the impact on our tourism economy and explain what they intend to do to support businesses that are being excluded. At a time when we should be doing everything possible to help businesses grow, create jobs and invest in Wales, we need a business rates system that supports ambition rather than holding it back."

Mr Davies is also encouraging local businesses to share their experiences as part of his Big Business Conversation, an initiative aimed at understanding the challenges facing businesses across Ceredigion Penfro and pressing both the Welsh and UK Governments for meaningful action.