Donald Anderson: How a tourist tax would help Edinburgh stay great

I'm always fascinated at how great things start. I remember trying to tell a journalist that I hadn't personally brought the MTV Awards to Edinburgh and being accused of false modesty.
Levying a small tax on thousands of tourists would  bring millions of pounds to the city. Picture: Ian Georgeson.Levying a small tax on thousands of tourists would  bring millions of pounds to the city. Picture: Ian Georgeson.
Levying a small tax on thousands of tourists would bring millions of pounds to the city. Picture: Ian Georgeson.

In fact, the MTV Awards came because the daughter of a Scottish Enterprise executive prodded her father when they were watching the awards and told him, “That’s the kind of thing you ought to be bringing to Edinburgh”. He took up the case! The origins of Edinburgh’s Christmas Festival were similarly random. A little over 20 years ago a woman called Lynn, who worked in the council leader’s office came in one morning after watching the film Miracle on 34th Street and said, “Why don’t we have a parade like that in Edinburgh?”

It was a very, very good question. This was the 90s, when there was a crisis in city centre retail. The Edinburgh area was losing 19 per cent of its retail spend to Glasgow and there was an array of empty shops throughout the city centre. There just wasn’t a compelling offer to attract shoppers into the city centre at the most important time of the year for shops – they do a third of their annual business in the run-up to Christmas.

Hide Ad
Hide Ad

A year later we had that parade in Princes Street, and the first Christmas Market took place in Princes Street Gardens as well.

The market was a disaster. The parade was a success, but it didn’t bring in the extra numbers we needed to help city centre retail. Council officers tried to abandon the whole thing – that wasn’t happening.

Afterwards the cavalry arrived in the shape of the dynamic Karen Koren, who wanted to bring an ice rink into Princes Street and, in the shape of a German Market, we managed to woo Edinburgh too.

Then came the big wheel – hugely controversial then, but now just part of the Christmas landscape. In 1999, half a million Christmas lights were added and the core of a successful new festival and visitor attraction was firmly established.

Read More
Isle of Skye tourists '˜should pay a tax'
Hide Ad
Hide Ad

The city now has two uniquely successful festival hubs that are the backbone of a genuinely year-round tourism industry. It’s never looked back. The market in Princes Street really is fantastic, and was so busy last year that access had to be limited for safety reasons.

The figures are staggering. In the first decade of Edinburgh’s Christmas, the economic impact grew to £36 million.

Now that has been grown by the council and Underbelly to £240m. Edinburgh’s Christmas has become one of the most successful events anywhere in the UK and a genuinely world-class event.

It helps make Scotland itself a better and stronger tourism destination, and underpins more than 30,000 jobs in the capital.

Hide Ad
Hide Ad

I spoke to someone with one of those jobs recently whilst being driven past the Christmas Wheel – a lovely taxi driver. However, when he looked at the wheel, he said: “It’s all money for the council I suppose.”

I was amazed anyone thought the council made money from Edinburgh’s Christmas. It doesn’t. The event is now – and always has been – subsidised to support important jobs like those of the driver himself.

Of course, event organisers will make money. I hope they do, because otherwise we wouldn’t have any festivals or events, but they also take huge risks with some losing huge fortunes on events that get hit by bad weather or just plain flop.

The truth is that Edinburgh’s Christmas, like so many festivals and events, has been created and supported on the cheap. Edinburgh’s festivals are part of what makes the city special. They’re one of the reasons that Edinburgh has the highest recorded satisfaction levels of any city in the UK, with a staggering 96 per cent of people happy with living here.

Hide Ad
Hide Ad

But it could be so much better. One significant gap in the recent proposed Scottish Budget was a tourist tax. This is a small tax on the visitor. It would create resources that would ensure that our festivals can compete effectively in a tourism market which is the world’s biggest and one of its fastest growing industries. There are critics, not least from the hotel trade which rightly points to higher levels of VAT here than in mainland Europe. However, any tourism tax pales into insignificance against the variation of the ‘rack rate’ in modern hotels. Anyway, it’s hardly a tax, rather it’s a mechanism to secure future investment. If all such a tax achieved was a one per cent increase in hotel occupancy – and Edinburgh’s Christmas on its own has helped generate far more than that – it would easily be justified. Nobody likes new taxes, but if we want an economy that grows as well for the next 20 years as it has for the last 20, this looks like a good way to help achieve that.

Edinburgh’s Christmas, much like the International and Fringe Festivals had very humble beginnings, but it is now one of the most successful events of its kind. Our festivals make Edinburgh a better place for its residents and visitors. They’ve ensured that empty shops in the city centre are a rare event these days, and they support and protect jobs of more than one in ten of the population. If we want to strengthen one of our most successful industries, create more jobs and build a stronger economy throughout the country, a tourism tax would be a very good place to start.