Edinburgh urged to halt bed tax plans as hotel trade slumps

NEW city leaders have been urged to abandon plans to revisit the controversial “bed tax” after fresh figures revealed a slump in the Capital’s hotel trade.

The data showed room occupancy and revenue declined in March by 3.9 and 8.9 per cent respectively.

Edinburgh compared poorly with other towns and cities in Scotland and the UK, with revenue rising in both Glasgow and Aberdeen.

The figures, from accountancy firm PKF, come after coalition partners Labour and the SNP pledged in their agreement to “consult further on the viability and legality of a transient visitor levy”.

Under the levy, visitors to Edinburgh would be asked to pay extra to support city services and promotional and marketing initiatives.

Hotel bosses today accused councillors of complacency over the fragile state of the hotel sector and warned any move to press ahead with new taxes would result in job losses.

Colin Paton, chairman of the Edinburgh Hotels Association and Portland Hotels, said: “What we always get from the city council is that Edinburgh is doing extremely well but the hotel sector is saying things are not that great.

“The new figures match other industry figures which show a softening in business in the city – Edinburgh has now dropped from number two after London to fifth place in the UK in terms of performance.

“The city always sees a seasonal drop in business in the early part of the year, with people having less money to spend after Christmas and New Year, and being less likely to travel over weather concerns – but the drop we’ve seen in 2012 has been greater than in the corresponding period last year.


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“Yet the idea of a visitor levy reappears in the coalition agreement – how stupid would it be for the council to waste time and resources on this when it would have a hugely negative impact?”

He added: “If the levy comes in on top of what is happening in the economy, there will be job cuts in this city.”

Gavin Brown, Conservative MSP for the Lothians and a member of the Scottish Parliament’s tourism committee from 2007 to 2011, said: “The tourism and hotel industries are critical to Edinburgh’s economy. The new coalition should publicly rule out the bed tax – it was a bad idea and continues to be a bad idea. We should instead be focusing our energy on persuading people to come to this city.”

Alastair Rae, real estate and hospitality partner for PKF, said: “Given that Edinburgh City Council is once again considering a bed tax on hotels in the Capital, it should be noted that the sector remains fragile and is prone to performance fluctuations and rising costs.


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“Therefore, a further charge on tourism in Edinburgh is at best ill-considered and at worst potentially harmful.

“The council need to realise that imposing a tax on an empty room will not raise much revenue.”