Edinburgh marketing chief wants '˜tourist tax' to generate Â£10m

Edinburgh is at risk of a slump in visitors if it doesn't invest in promoting events, John Donnelly has warned. Picture: Steven Scott Taylor

John Donnelly, chief executive of Marketing Edinburgh, said the city faces a “flight to the bottom” due to dwindling funding for dedicated promotion of the city.

Speaking ahead of the annual Edinburgh Tourism Action Group summit, he said it was significant that the UK was the major tourism destination in Europe which did not generate income through a tourism levy or bed tax.

He has criticised the Scottish Tourism Alliance, the main voice of the tourism industry, for launching a campaign against the possible introduction of a tourist tax without any new research into the possible impact of such a scheme.

The STA warned the introduction of a visitor tax could “damage” and “hinder” one of Scotland’s best-performing industries after the idea was backed by former justice secretary Kenny MacAskill to help reduce the burden on local taxpayers.

Mr Donnelly said it was wrong-headed for the industry to claim a tourist tax in Edinburgh would make the city less competitive when it was already lagging behind Aberdeen (£2.5m), Glasgow (£6m) and Manchester (£6m) on dedicated promotional budgets.

He warned the city risked a slump in visitors if it failed to keep pace with rivals such as Amsterdam, Barcelona, Copenhagen, Stockholm and Helsinki.

John Donnelly said a levy could fund new events. Picture: Greg Macvean

Senior politicians in Edinburgh have been promoting the idea of a form of tourist tax for more than a decade to meet the costs of hosting events such as the Edinburgh International Festival, the Fringe, and the Hogmanay celebrations.

A recent study on the future of Edinburgh’s festivals warned they risked losing their “premier division status” if levels of funding could not be maintained in future. Consultants said “new thinking and innovative solutions” were needed to break a stalemate over new funding mechanisms.

Mr Donnelly, whose organisation has a budget of just £1.7m, suggested a tourist tax should include attractions, transport, bars and restaurants, rather than just hotels, saying it could generate £10m.

He added: “The big stumbling block is people only seem to talk about the mechanism of a tourism tax. No-one ever talks about the benefits of what you can do to with that money. That should be the starting point.

“It’s not just about promoting the city, it could also be about creating new events in the shoulder months, when it is quieter in Edinburgh.

“Our current funding from the council is £960,000 and that has gone down 30 per cent in four years. I fully understand the position the council is in.

“It has been unable to raise the council tax for nine years in a city with a growing population. The council is telling us it will not be able to invest in us for ever. They are saying everything is under review. Something has got to give or we will have to just accept that Edinburgh will not be in a position to promote itself.

“It would be a flight to the bottom for not just Edinburgh, but for the whole country, as 60 per cent of visitors to Scotland come to the city.

“Other cities have increasing budgets, competition is becoming really fierce and none of them are sitting around waiting to see what Edinburgh is going to do. It’s not scaremongering. The reality, if we don’t promote the city properly, is fewer people will come. Is that really what people want?”