Tourism bosses have warned businesses are being “bled dry” by red tape amid fears new licensing rules will drive small family-owned operators out of the market.

In written evidence to the Senedd, North Wales Tourism urged ministers to “slow down”, warning of a growing regulatory burden and a 30% business downturn in some areas.

Last week, the Welsh Government set out plans to license self-contained, self-catering accommodation on the back of reforms including a tourism tax and mandatory registration.

North Wales Tourism, which represents more than 1,300 businesses, stated its members feel the sector is being “bled dry” to fund other priorities without reinvestment.

The not-for-profit membership organisation warned additional red tape risks driving investment toward competitor destinations such as Ireland, France or Spain.

Appearing before the Senedd economy committee, Glenn Evans, who chairs North Wales Tourism, said the industry is already facing a “ream” of challenges.

Mr Evans warned of a lack of data on the sector, which is Wales’ largest private-sector employer, warning the bill has the potential to disrupt the marketplace.

“The consequential effects of it could be profound,” he said. “And of a scale as yet unimaginable or able to quantify as far as the Welsh Government is concerned.”

He agreed consultation and engagement on the tourism bill had been tokenistic.

Mr Evans expressed concerns about the 182-day letting threshold to qualify for business rates instead of the higher council tax.

A self-catering operator for more than 25 years, he told the committee: “There is a cumulative impact, just the sheer volume of legislation to get our heads around.”

Mr Evans described layering a licensing scheme for some operators on top of registration as onerous, with some second home owners stopping letting due to the increased burden.

Charlie Reith, a board member of the Short-term Accommodation Association, suggested the tourism bill has been rushed through by Welsh ministers.

“We are concerned the Senedd is being asked to approve something without a clear evidence base and time to scrutinise,” he said.

He described the Welsh Government’s acknowledgement that it has been a "particularly busy time” for the tourism industry as a “huge understatement”.

David Chapman, executive director of UKHospitality Cymru, told the committee the industry has been “beset” by regulations over the past five years.

Mr Reith, who is also an Expedia group director, said: “If you’re operating a self-catering business, you’re facing much more regulation than you have done in previous years.”

He said operators face applying for planning permission, 100% increased council tax, removal of small business rates and tax changes for furnished holiday lets.

He told the committee: “Cumulatively, that is potentially thousands of pounds in additional costs… so any additional requirements or fees have to be seen within that context.”

Asked about a £75 annual licence fee, Mr Reith questioned the credibility of the indicative figure and described a £4.5m forecast of compliance costs as an underestimate.

Councils warned new licensing rules – which will come into force in 2029, if passed – could impact Wales’ ability to host major events by deterring casual hosts from renting out rooms.