An outdoor education centre is seeking a judicial review of the "irrational" decision to restrict residential stays.
A pre-action protocol letter has been sent on behalf of Rhos y Gwaliau in Gwynedd, run by Sara and Ed Jones for 16 years.
Competitors over the border have been open for weeks, with residential visits allowed in England from 17 May and 31 May in Scotland.
The Welsh government said the rules were in place to keep people safe.
Mr and Mrs Jones said restrictions in Wales remained much tighter, resulting in schools potentially favouring trips elsewhere in the UK.
Currently in Wales, up to three extended households can share accommodation. But overnight school trips are not allowed, except small group visits using single accommodation, such as Duke of Edinburgh expeditions.
Mrs Jones said: "We want to hear the evidence for preventing overnight stays at outdoor education centres - so far we have received no justification at all.
"Why should children who are already operating within a bubble for educational purposes be treated the same as a group of non-related adults? And how is a bubble of school children sharing a dorm worse than 200 adults cramming inside a Boeing 737?
"Children and education should be a higher priority and viewed separately from the general public - they are a lower risk group in terms of age and cases have remained flat in schools."
'Lost two summers'
She added: "We have now been continually closed since March 2020 - we haven't had a bumper summer in 2020 like many tourism and hospitality businesses.
"We are a year-round business but, as you would expect, summer is our busiest time.
"We have now lost two summers - two peak seasons of business - and still have no idea when we are likely to be able to resume trading. To add to that, our costs will now rise again with the tapering furlough as it did last summer.
"We have now had to weather this storm twice - it's an absurd situation and it needs to be reviewed urgently."
Tim Taylor runs Patterdale Hall in Penrith, England, which he said had benefited from the restrictions in Wales.
"Since the guidance changed in England, we have been inundated with calls from a number of schools each day wanting to find alternative residential provision where they would have once visited Wales.
"It's really worrying for the damage that will do to the Welsh centres, bearing in mind 98% of their business is repeat business."
Lizzie McPeake of JMW Solicitors, which have been employed by Mr and Mrs Jones said the decision to not allow centres in Wales to open was "completely irrational" and "once again it's young people bearing the brunt of poor decision-making".
'Stop spread of virus'
A Welsh government spokesperson said: "Outdoor education centres in Wales can open for the outdoor activities they offer.
"The rules in Wales, which apply across the board, prevent children and adults from several different households staying together overnight.
"These rules are in place to help stop the spread of the virus and to keep people safe.
"We realise businesses have been severely impacted by Covid lockdown rules. That's why we have put over £2bn of support in place for businesses in Wales, including a £2m fund specifically aimed at supporting the residential outdoor education sector between June and September 2021."