Edinburgh tourism tax ‘unlikely’ to deter visitors

Aerial view over the historic center of Edinburgh Scotland from Calton Hill
Aerial view over the historic center of Edinburgh Scotland from Calton Hill
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A TOURIST tax is “unlikely” to deter visitors from coming to Edinburgh, council chiefs have claimed.

They argued a £1 a night levy on hotel stays – often cited as the most likely tax for the Capital to introduce – would hardly be noticed by most tourists.

The council’s comments come after the Federation of Small Businesses revealed 76 per cent of its members in Edinburgh were opposed to a tourist tax.

Research by council officials said some international studies concluded demand for travel was only influenced by large exchange rate fluctuations, not a hotel room tax. And a study by Nottingham University found UK tourism was also less sensitive to price changes, with a one per cent increase in cost resulting in only a 0.6 per cent drop in demand.

The council research said: “The addition of a modest charge would only represent a small proportion of the overall travel cost to Edinburgh. Some argue tourists, whether international or domestic, frequently have above average incomes and can afford to pay taxes without undue hardship.”

Council leader Adam McVey said the SNP-Labour administration believed a tourist tax – or transient visitor levy (TVL) – was in the best interests of residents, the tourism industry and ultimately also those who visited the city.

“The substantial research we have done demonstrates that not only is a TVL unlikely to adversely affect Edinburgh’s accommodation industry, but that handled correctly, it can help to secure the ongoing sustainability and health of tourism in the city.

“With some of the highest visitor numbers in the UK, we already experience incredible pressure on our resources and services to meet the demands from tourism. These numbers are projected to grow still further, and in an environment where public spending continues to shrink across the piece, we must consider more sustainable ways of securing long term investment fair to all.”

Deputy leader Cammy Day said Edinburgh’s four million visitors each year brought investment to the city but also costs in terms of council services. “The introduction of a levy could bring substantial revenue into our city – for example, a small charge of £1 per person per night could generate over £11 million a year. This would help to improve the offer to residents while enhancing the quality of the visitor experience; securing the long-term appeal of Edinburgh.”

John Donnelly, chief executive of Marketing Edinburgh, said: “Finding a sustainable way to invest in Edinburgh whilst balancing the needs of our residents, our tourism industry and the wider business community is crucial.

“We must protect Edinburgh’s position as one of the most desirable destinations in the world – and the more we invest, the more we grow, to the benefit of all.

“If we are to identify the right solution, it is important to keep an open mind. We need a clear, balanced and thoughtful debate, considering the merits and disadvantages of every option. That means nothing should be off the table at this stage – we must seriously contemplate a levy as a potential solution and explore the positive impact its introduction could have.”