Hospitality industry representatives have described last Friday’s implementation of the City of Edinburgh Council’s visitor levy as ‘a landmark moment for all the wrong reasons’.
Coming into force on July 24th, Edinburgh’s visitor levy – the first of its kind in the UK – now requires overnight visitors to the city to pay an additional 5% charge on their accommodation, creating a fund of money that the council should then use to cover the cost of visitor-specific facilities and services.
Empowered by the Scottish Parliament’s 2024 Visitor Levy Bill, Edinburgh has led the way with this introduction, but Glasgow, Aberdeen and Stirling councils have also voted in favour of adopting similar measures in the near future.
However, hospitality industry trade bodies remain very sceptical of what they have described as an ‘economically damaging tax’ that risks driving away tourists, or at the very least, reducing their spending power while they are here.
As the Edinburgh levy became active, UKHospitality Scotland highlighted how increased prices were already ‘being forced on to consumers’, as the organisers of the Edinburgh Jazz and Blues Festival noted the increase in hotel prices for performers coming to the city.
Executive director of UKHospitality Scotland, Leon Thompson, said: “The UK’s first visitor levy is not a cause for celebration. It’s a landmark moment for all the wrong reasons – increasing costs for visitors, hitting Edinburgh’s local economy and harming our reputation on the world stage.
“It has not taken long for visitors to notice the price increases that hotels have been forced to pass through, because of the significant 5% visitor levy, alongside increased costs of operating. Including increases in business rates.”
Thompson warned: “If this was replicated by local authorities across Scotland, particularly in rural areas, the ramifications could be far greater, with significant impacts on tourism, hospitality and the local economy as a whole.
“I hope local authorities currently consulting on introducing a levy undertake the detailed economic impact assessments required to fully understand the impact on their local economy and community.”
The Scottish Tourism Alliance also called for ‘close monitoring’ of the effects of the Edinburgh visitor levy.
STA chief executive, Marc Crothall MBE, said: “Introducing a successful visitor levy scheme is about the right application, right place and right time, if it is to act as a force for good that enhances our visitor offering and appeal.
“At the moment, it is the view of the majority of those in the industry that I have spoken to that none of these conditions of success is currently in place, and the introduction of a further charge on those who choose to visit and stay in a destination risks more harm than good.
“One of the biggest concerns within the industry is around the impact on secondary visitor spend once people arrive, which we hear, without a levy in play, is under pressure, particularly among families and groups,” said Crothall.
“There’s great uncertainty around how visitors will respond and if it will affect demand by both domestic and international visitor be it for business and or leisure.
“Will it lead to some choosing not to stay over in Edinburgh or to take shorter stays, or will it result in people still coming but spending less in the destination’s restaurants, pubs, shops, attractions, and other local businesses?
“These are impacts we’ll be monitoring over the coming weeks and months, and we will be expecting authorities to do the same.”
