The hospitality and leisure sector is facing two significant policy developments that businesses operating in Wales and England should have on their radar.
In Wales, the Welsh Government has announced plans to cut business rates by 30% from 1 April 2027 for qualifying high street hospitality and leisure properties. Meanwhile, in England, the Government has published its response to its consultation on introducing Overnight Visitor Levy powers for strategic authorities.
While the two measures are separate, both have the potential to affect operating costs across the sector. Here, we look at what has been announced and what businesses should be considering now.
Wales: 30% business rates reduction for hospitality and leisure
The Welsh Government has announced plans for a permanent 30% reduction in business rates for eligible high street hospitality and leisure premises from 1 April 2027.
The support is intended to benefit businesses occupying small and medium-sized properties with a rateable value below £51,000.
The qualifying sectors are expected to include:
• Food and drink hospitality: pubs, restaurants, cafés, bars, food courts, licensed clubs and live music venues
• Visitor accommodation: hotels, guest houses and hostels
• Leisure venues: cinemas, theatres, libraries, museums and gyms
Retail shops will also continue to benefit from the support, building on the lower multiplier already in place for 2026/27.
The planned 30% reduction represents a significant increase on the 15% temporary relief currently available to food and drink hospitality businesses in 2026/27. That existing relief is subject to a £110,000 cap per business across Wales, as well as subsidy control limits.
How will the new support be funded?
The Welsh Government has indicated that the new support will be funded through a small increase in the higher multiplier paid by properties with a Rateable Value of more than £100,000. The detailed arrangements have yet to be finalised and regulations are expected to be published in the autumn and will take effect from 1 April 2027.
The precise business rates multipliers for 2027/28 will be confirmed as part of the Welsh Government's budget preparations, following the UK Government's Autumn Budget, scheduled for 28 October 2026.
What could this mean for larger operators?
The detail of how the 30% reduction will operate will be particularly important for larger hospitality and leisure businesses. The announcement indicates that the new permanent support will replace the current temporary 15% relief for food and drink hospitality, which is subject to the existing cap and subsidy control requirements for larger chains.
Although the final regulations have yet to be published, the current expectation is that the measure could be delivered through an extension of the lower multiplier to eligible hospitality and leisure premises.
At present, the lower multiplier applies to retail properties. If this approach is confirmed, the 30% reduction would not be subject to the existing £110,000 cap or subsidy control restrictions, but eligibility would remain linked to the £51,000 rateable value threshold.
England: Government responds on an Overnight Visitor Levy
Hospitality businesses in England also need to be aware of developments around a proposed Overnight Visitor Levy which has received widespread coverage recently. The Government has now published its response to the consultation on giving strategic authorities new powers to introduce a levy on paid overnight stays. The consultation was launched in November 2025, ran for 12 weeks, and attracted 1,223 responses.
What would the Visitor Levy look like?
Under the proposals:
• All mayoral and foundation strategic authorities (FSAs) will have powers to introduce an Overnight Visitor Levy
• Strategic authorities will be responsible for administering and collecting the levy.
• Levy revenues can be invested in interventions aligned with regional growth strategies.
• Mayors and other local leaders will have to consult locally before introducing a levy and provide businesses with advance notice of its introduction or any subsequent changes.
• The levy will apply to short-term visitor accommodation, subject to certain national exemptions and any discretionary local exemptions.
• It will be calculated as a percentage of the accommodation cost.
• There will be no cap on the levy rate and no limit on the number of nights for which it can be charged.
• Accommodation providers will be liable for the levy and will calculate and declare their liabilities through a self-assessment process.
• Providers may choose to pass some or all of the cost on to guests through their accommodation charges.
The Government says it will continue working with businesses and accommodation providers on the technical design of the levy. It expects local leaders to be able to set out plans for how revenues would be invested by March 2028.
What should hospitality businesses be doing now?
For businesses operating in Wales, the proposed business rates reduction could provide meaningful savings from April 2027, but there is still important detail to come.
Operators should review their Rateable Values and existing business rates liabilities, particularly where they have multiple properties or properties close to the £51,000 threshold.
In England, accommodation providers should begin considering how a potential visitor levy could affect their pricing, administration and overall operating costs. The introduction of a levy will ultimately depend on decisions made by individual strategic authorities. Businesses therefore have an opportunity to engage with local consultation processes and understand how any proposed levy could operate in their area.
Both developments underline the importance of keeping a close eye on changes to the business rates and wider taxation landscape. For hospitality and leisure operators, relatively small changes to rates, thresholds or additional charges can have a material impact on property costs and margins.
At Dunlop Heywood, we will continue to monitor these developments and provide updates as further details emerge. For businesses with significant property portfolios, understanding the potential impact of changes before they take effect can help inform budgeting, forecasting and wider property strategy. Contact us at info@dunlopheywood.com
