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Edinburgh could become most expensive city in Europe for tourists as Councillors vote in favour of Tourist Tax

Edinburgh could become the most expensive city in Europe for tourists to visit following the decision by Councillors in Edinburgh today (7th February) to introduce a city-wide tourism tax (TVL). Edinburgh, should the government give it approval, would be more expensive than Paris, London or Rome. The city would also be the first one in the UK to adopt the measure.

The news has been met with dismay by the hospitality industry. Willie Macleod, UK Hospitality’s Executive Director for Scotland, said, “We are extremely disappointed today that the City of Edinburgh Council has voted in favour of a tourist tax.

He believes that the Leader of Edinburgh Council Cllr McVey has ignored the concerns of the hospitality industry.

He said, “During the debate, Cllr McVey stated that consultation was a critical part of their process. Our members in the city would disagree, they do not support the introduction of a tourist tax and their opinions have been ignored.

“It has been suggested that a tax will raise up to £14m but economic impact modelling shows that it would cost the city £94m, making it the highest taxed city to visit in Europe. In these days of austerity, it seems bizarre that councillors would jeopardise losing millions of pounds of potential revenue from not only international visitors but also “staycationers” from Scotland and the rest of the UK.

“Furthermore, the City of Edinburgh Council vote comes despite no legislation having yet been passed by the Scottish Parliament and the Scottish Government has yet to initiate its promised consultation on any such legislation.”

Data collected by STR Global in 2018 found that, of the £11m revenue City of Edinburgh Council anticipates would be raised from a £2 a night transient visitor levy (TVL), it could cost the city up to £94m. STR Global estimates the introduction of a TVL would lead to a reduction in accommodation turnover in Scotland of £128m per annum and an overall negative impact of £191m per annum.

STR Global also found that 15% of Edinburgh visitors would reduce their spending as a result of a TVL, 5% would stay outside the city and 2% would not visit at all. This change in behaviour is estimated to result in a total decline in visitor spend in Edinburgh of £94m per annum.

A TVL will not just target ‘tourists’ or international guests but also ‘staycationers’ – in other words anyone staying in the city from anywhere else in the UK, whether it is for business or leisure.

According to UK Hospitality, around 5 million trips (accounting for 15 million overnight stays) are made by visitors who stay in Edinburgh and contribute to the local economy. In comparison an average 18.5 million day visits are made to the city each year. Any TVL will unfairly target those who stay in commercial accommodation, exclude both day visitors (who contribute to congestion and make use of city infrastructure) and the substantial numbers of overnight visitors who stay with friends and relatives.

UK Hospitality is not alone in its position. The proposed tax is not supported by many relevant bodies, including but not limited to, the Scottish Tourism Alliance, Scottish Tourism Council, Federation of Small Businesses, Hosteling Scotland the Edinburgh (and other city) Hotels Association, Association of Scotland’s Self Caterers, Association of Scottish Visitor Attractions, Scottish Destination Management Association.

UKH’s position represents the views of 700-member businesses operating 70,000 outlets throughout the UK and is endorsed by the Board of UKH, the organisation’s Committee for Scotland, Scotland’s four city hotel associations, member businesses (including independent operators and large national and international chains) which have invested in Scotland.

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