Could Edinburgh be damaged by introduction of tourist tax?

Tourists and holidaymakers in Edinburgh. Picture; Jane Barlow
Tourists and holidaymakers in Edinburgh. Picture; Jane Barlow
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A “TOURIST tax” which would see extra charges added to hotel bills has divided opinion in the Capital, according to an Evening News poll.

We asked 1350 readers online if they agreed with plans to introduce the levy and found that it had support from 51 per cent and opposition from 49 per cent.

The debate over tourist tax has divided opinion. Picture; Getty

The debate over tourist tax has divided opinion. Picture; Getty

Council leaders are seeking powers to bring in the tax as part of their plans for the £2 billion City Deal, and it could be in place by spring next year.

However, tourism leaders and opposition politicians have warned that it would damage the Capital’s appeal as a holiday destination.

They fear the tax – expected to be around £1 per night – would be enough to turn travellers off coming to Edinburgh.

Marc Crothall, chief executive of the Scottish Tourism Alliance, said: “Introducing a ‘tourism tax’ is more than likely to discourage international tourists from visiting Scotland and negatively impact our local economies.

Picture; Steven Scott Taylor

Picture; Steven Scott Taylor

“Despite being acknowledged as being ‘Scotland’s most important industry’, Scottish tourism is increasingly challenged to remain competitive as a destination.

“The UK already imposes more tax on visitors than most of our competing destinations through VAT and APD [air passenger duty]. There is a significant risk of further damaging Scotland’s appeal as a tourism destination by applying a further cost to visitors.”

Tory Lothian MSP Miles Briggs called for a re-think on what he said were “damaging” proposals.

He said: “I share the concerns of Edinburgh’s smaller tourism operators – who make a huge contribution to the city’s economy – at proposals which would see Edinburgh become the highest taxed destination in the whole of the UK for visitors.

“The Edinburgh economy benefits hugely from tourism income but we live in an increasingly competitive international visitor market where more and more cities across the world are competing for tourists.

“Making coming to Edinburgh more expensive sends out completely the wrong message to people considering coming to our city and is a bad mistake.

“Council leaders should listen to the views of Edinburgh tourism operators and rethink these damaging proposals.

“We should be coming up with new ways to make our city even more attractive to tourists and not deterring visitors with additional taxes.”

An update on the plans went before councillors yesterday as part of creative/cultural propositions under the City Deal.

It is hoped the introduction of a tourist charge could generate up to £15 million annually for Edinburgh’s festivals, including cash for investment in areas such as street cleanliness.

A city council spokesman said: “Edinburgh is world famous for its cultural offering.

“We are currently in discussions with the UK and Scottish governments as part of City Region Deal negotiations to find innovative ways to continue to fund this important contributor to the Scottish economy.”

Hotel owners said they feared guests would not stand for extra charges.

Simon Marriott, manager of the Lauderville Guest House in Mayfield Road, said the levy would not be the right way to go. He said: “I don’t think I’d agree with it, it would put people off.

“You just want to charge them for what they are already paying for – the room and the service.

“It’s like credit card or debit card charges – they go up and up all the time and we even pass that on to the guest. Even if it’s a pound or 50 pence they will question it.

“At the end of the day it’s the customers that are going to pay for it which is a shame.”

Liz McAreavey, chief executive of Edinburgh Chamber of Commerce, stressed that whatever path was taken it was “critical” to invest in the Capital to ensure it remained an appealing place to visit.

She said: “Many UK cities are looking at powers to set a local levy to invest in support for tourism and culture.

“Edinburgh is a world-leading festival city and tourism is a key economic sector for the Capital. Continuing to invest in maintaining our world-leading reputation and status is critical to the ongoing economic health of Edinburgh.”

She added: “It has yet to be decided how this investment might be funded and how the levy might be applied, though several options are being explored.

“Critical to the debate is maintaining competitiveness whilst being recognised as an international city, reaching out to the rest of the world through our success and reputation as a world-class vibrant, modern, well-connected and cultural capital city. In the end it’s excellence and quality that wins the day, but this requires investment and innovation.”

The debate comes as the Capital yesterday hosted the annual Edinburgh Tourism Action Group (ETAG) 
conference.

Robin Worsnop, ETAG chairman and chief executive of tour company Rabbie’s, said although the case for and against the introduction of tourist taxes had been made “ad nauseam” over the years, the industry was still waiting to find out how such a scheme would work or what it would be used to pay for.

He said: “The topic is live in many cities across the UK. One of my challenges to those who sought funding was to create an investment case for any such funds.

“I’ve been reliably informed that these investment cases have been put together as part of Edinburgh’s City Deal discussions with both the Scottish and UK governments.

“We look forward to seeing the detail in due course.”

He added: “There are mixed views in the industry about this. People still say ‘Look at the basket of taxes that we have in comparison with the rest of Europe’. That’s not 
changed.”

florence.snead@jpress.co.uk