The trade body claimed current plans leave Welsh hospitality businesses worse off than their English counterparts.
A typical pub would be more than £6,000 worse off and an average-sized coastal hotel would be at least £20,000 worse off.
UKH Cymru executive director David Chapman said Welsh hospitality businesses were left “dismayed and frustrated” by the Welsh government’s decision to reduce business rates support to 40% relief.
This was much reduced from the 75% awarded to English businesses, which many had hoped to be carried over to Wales.
Chapman added that this decision intensified the pressures many businesses were already facing.
The call for more support comes as UKH Cymru, alongside leading restaurants, met with Rhun ap Iorweth MS, leader of Plaid Cymru, and Luke Fletcher MS, economy spokesperson for Plaid Cymru, as part of UKH’s cross-party engagement.
The focus of the meeting was action on business rates.
It looked at both short-term support in the form of relief and the need for root-and-branch reform of the business rates system.
Chapman said: “We had a good hearing from Rhun and Luke, and many of these points were included in Rhun’s questioning of the First Minister yesterday."
He continued: “It’s clear we now have a system that punishes hospitality businesses for being based in Wales. These tax rises, alongside the introduction of a tourist tax and other punishing regulation, will have a stark impact on local communities, jobs and the reputation of Welsh tourism.
“We’re calling for the Welsh government to reconsider its level of support and use the funding allocated by the UK Government to implement 75% business rates relief.
“In the long-term, the unfair and outdated business rates system needs to be overhauled, with a root-and-branch reform to bring it into the 21st century.”