Cockburn welcomes the “Tourist Tax” Bill

POSTED ON May 25, 2023 BY Terry Levinthal

As Edinburgh and Scotland continues to re-open its doors to visitors, now is the time to introduce this new tourist tax.  Building a new funding mechanism that channels visitor activity into enhanced visitor management and improvement is positive and very much overdue.

In September 2022, the Scottish Government announced that it would it put in place a visitor levy for tourists coming to Scotland.  Largely known as the “tourist tax”, it would be a charge placed on accommodation.  It followed a series of consultations launched in late 2018 looking into the issue.

Today (25 May 2023) the Visitor Levy (Scotland) Bill was placed before the Scottish Parliament. If approved, this will give local councils the power to apply a levy on stays in overnight accommodation based on a percentage of the accommodation cost. It also makes clear that all money raised would have to be reinvested locally on facilities and services substantially for or used by visitors, enhancing the tourist experience and benefitting local communities and their economies.

The Cockburn supported the proposals, setting down a number of suggestions to make the levy more transparent and more effective.  These included ringfencing the levy for use on projects or programmes that improve the public realm or the visitor offer.  For example, improved streetscape management or a refreshed display in the City’s museums would be suitable projects.  As such, we are pleased to see this suggestion carried forward. We also argued that heritage places and buildings should benefit directly.  In almost any visitor survey, it is the city’s historic architecture and historic townscape that attracts visitors.  However, the amount of public money that goes into the conservation of the historic fabric is the city is derisory despite having a World Heritage Site in its centre.  A recent survey suggested that over 70% of all traditional buildings in the WHS had a critical repair need.  We also suggested that a dedicated committee be established to decide where the money should be spent with a commitment to publish an annual report, outlining the programme of investment that the levy has enabled.

There is no doubt that the hotel and tourism industry will not welcome this.  It will argue that it will deter visitors.  Hotels and other accommodation providers see the collection of the levy as a burden and chore.  Given the current controversary regarding short-term lets in the city and the new licensing system and clarified planning policies, the self-catering industry will argue that this is yet another nail in the coffin for their sector.  However, given that some operators feel able to charge upwards of £35,000 for a flat in the Old Town during this year’s Festivals, a couple of quid extra will not be noticed.

Whenever you check out of a hotel in North America or on the continent there is a line in the bill that says “Local Taxes”. The rate varies from city to city. In Florence it is about 5 Euros per person per night, depending on the number of stars of the hotel; in Venice it is similar but varies with the time of year; the rates in Paris also depend on the quality of the hotel, but you are likely to pay about 3 Euros a night for a three-star stay; in Chicago you pay about 17.5% of your hotel bill. None of these cities has suffered a drop in tourists because of these taxes.

There is a concern that local authorities will use the new visitor levy to shore up general expenditure, a concern shared by the Cockburn.  However, the proposals agreed by the Scottish Parliament will prevent this, requiring funds raised to be ring-fenced for facilities and services substantially for or used by visitors.  That said, we would  hope that some latitude is available to spend the money on place-based improvements that benefit local communities too – after all, a great place to live is also a great place to visit.

As Edinburgh and Scotland continues to re-open its doors to visitors, now is the time to introduce this new tourist tax.  Building a new funding mechanism that channels visitor activity into enhanced visitor management and improvement is positive and very much overdue.

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