The momentum for a tourist tax in Edinburgh continues to gather pace and may yet become unstoppable – but it is a daft answer to the wrong question.
For the last ten years I have worked internationally. I have clients in Edinburgh, London, Toulouse – and points in-between or beyond. Because I sometimes organise events in Edinburgh, I have had cause on occasion to become a “tourist” in my home city and stay in hotel venues I use, and have naturally done the same around the world. So strangely, I know what it’s like to “visit” Edinburgh.
Around the world I have stayed in some top-flight hotels and some really grubby ones and I reckon I have a fair understanding of how to compare hotels and cities online before I choose to part with my money. Based solely on my experience, rather than my innate mistrust of giving any politicians of any colour my hard-earned money, I think a tourist tax is a bad idea.
I have paid a tourist tax many, many times and I can’t say it especially hurts. It’s usually only a euro (or two if my wife is with me) on an overnight stay in a town I am passing through. Usually my holidays are only long weekends and so the cost is not oppressive. There is however a very big difference about paying the tourist tax at Cocquelles before catching the Eurotunnel home and paying for ten nights in a holiday destination for a couple – suddenly two euros becomes 20 and that’s when I get more annoyed.
Would it make a difference to me choosing to go to one destination from another? Probably not. If I want to go to Porto or Leipzig (as I did earlier this year) or go to Dublin or San Sebastian (as I did last year) a tourist tax might not be enough to put me off. But that’s for two reasons and I don’t think my behaviour as a consumer is likely to be much different from others.
The first is that it is the destination that matters most to me. Secondly, hotel accommodation in the UK is expensive because the full rate of VAT is levied on British hotels, yes the full 20 per cent. In other countries, tourist tax or not, the VAT is usually significantly reduced. For instance VAT on hotel rooms is seven per cent in Germany, nine per cent in Ireland, ten per cent in France and Spain and 12 per cent in Sweden. So when in some foreign lands there is a further levy of one euro per person per night, and it is included in the national and local taxes section, it is really not very noticeable.
It will be different for Edinburgh, though, and that is because it will become the first city in the UK to do this, so it will immediately be making itself less competitive than say Glasgow or York – and other competitors that are not choosing to go down this road.
And for those politicians who say they are worried about Air BnBs having an impact in the city, let me tell you that as they are unlikely to be VAT registered they are also unlikely to be included in any tourist tax collection. Overnight they will become more attractive against the hotels, guest houses and registered B&Bs that will be levying the tax – making business even harder for them in the process and encouraging more Air BnBs to be established. You might call it an unintended consequence.
The real problem is that local councils don’t get their fair share of taxpayers’ cash – and Edinburgh is the worst hit. If all the business rates that are collected in Edinburgh came to Edinburgh, we wouldn’t have this problem. Sort that and there would be no need for the tourist tax. That’s why it’s a daft answer to the wrong question.