British Hospitality Association slams Edinburgh bed tax plan

The tourism tax has been branded unfair. Picture: Cate Gillon

The British Hospitality Association has attacked the prospect of visitors to the Capital being charged extra to make up for public funding cuts.

The body, which boasts a 40,000-strong membership, claims it would be unfair for the hotel sector to be “singled out” under the current proposals, instead of all tourism businesses.

The BHA says its research has found visitors to the UK are already paying “significantly more” tax than in most other European cities. And it claims it would be “naive” to think visitor numbers would be unaffected if extra charges were imposed.

Supporters of the proposed scheme believe it could generate more than £15 million a year to help protect budgets of the city’s festivals, arts venues and marketing efforts, which have all been targeted for cuts.

Additional charges could even be imposed during peak periods such as the Edinburgh festivals season and the Hogmanay celebrations to help the city meet the costs of hosting those events. Last year, a major study into the long-term future of the festivals warned of the dangers of complacency and the risks of them losing “premier division status” if funding levels could not be maintained.

However, a tourist tax is being resisted by organisations including VisitScotland, which believes it could hinder the growth of the industry and damage one of the most successful sectors of the economy.

The BHA says it would be “iniquitous and inequitable” for hotel guests to be “penalised” when other accommodation providers, including people using services such as Airbnb, would not face the charge.

Senior figures claim city centre hotels already pay almost £500,000 on average in business rates alone.

Ufi Ibrahim, BHA chief executive, said: “Tourism generates almost £5 billion in revenue for Scotland each year, which in turn creates a ripple effect to many other business and leisure sectors including retail, entertainment, business  services and transport. Tourism is everyone’s business and we reject the idea that hotels should be targeted to fill gaps in local authority finance or funding for the arts, culture or tourism marketing.

“Hospitality and tourism are highly price-sensitive, and domestic and international visitors have significant destination choice, as do business tourism and event organisers. Our industry is already faced with significant challenges in terms of our price-competitiveness versus other destinations.”

Willie Macleod, executive director of the BHA in Scotland, said: “There should be no new mechanisms to raise tax from visitors until our rates of VAT are comparable with those charged by our European competitors.”

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