Tourist body warns over visitor tax plan for Edinburgh

Edinburgh Castle
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THE belief Edinburgh has a buoyant tourism industry is misconceived and a tourist tax would harm international competitiveness, Scotland largest representative organisation for the trade has claimed.

The Scottish Tourism Alliance claimed the Capital, Scotland’s busiest destination, was “not having a good year” with hotel occupancy down 1.4 per cent.

In an email to members, it said: “Edinburgh is one of the few European cities in decline. Glasgow figures are showing the same trend. There is a misconception of a buoyant industry.”

And the STA said the UK ranks 135 out of 136 countries for international tourism price-competitiveness.

“We are simply at the bottom of the pile when it comes to competing on price against other global destinations.

“If price and value for money is a deciding factor in a visitor’s choice of destination, there are 134 places in the world that will be more attractive to them than the UK.

“Where would we sit in relation to price competitiveness if we introduced another tax on the international visitor, and indeed our domestic tourists?” The STA said with the Scottish Government’s national consultation under way, it felt it was time to set out “some of the facts and figures that lead us to believe that a tourism tax would have a negative impact on Scotland’s tourism industry”.

It argued that many tourist destinations can hide additional taxes behind the room price advertised, but in the UK prices quoted must be inclusive of all taxes and compulsory payments.

“We would be at a competitive disadvantage to other locations with a much lower VAT, who do not include any tourist taxes in public prices. Prices displayed by our competitor destinations will always look more attractive at first glance.”

The STA said tourists coming to Scotland already faced rates for VAT and air passenger duty which were among the highest in the world.

And it quoted two pieces of research from Nottingham University suggesting that a price of one per cent relative to competitors reduced tourism by one per cent and that a one per cent increase in UK prices would lead to a 0.61 per cent fall in tourism expenditure.

“The Association of Scotland’s Visitor Attractions published recent statistics which showed the average visitor spend in the last quarter in attraction shops in Scotland was just £1.59. In catering outlets in visitor attractions in Scotland, the average spend was £1.19.

“A tourism tax could negatively impact businesses that rely on the tourism economy by reducing visitor spending right across the industry; in pubs, restaurants, shops, cafes, visitor attractions and entertainment venues.”

But Council leader Adam McVey said: “Cities like Florence have seen sustained growth in visitors since they introduced a “tourist tax” in 2011, up around two million visitors a year in just seven years. Edinburgh’s market is still buoyant but without a revenue stream to enable investment, our growth risks undermining our success.”