Tourist tax would cut Edinburgh’s income by £94m
INTRODUCING a tourist tax in Edinburgh would reduce visitor spend by more than £90 million, the hospitality industry’s trade body has said.
City leaders want to charge visitors £2 a night – or two per cent of the cost of their overnight stay – in a bid to raise an extra £13 million annually.
However, hotel bosses and pub landlords insist the move would damage one of Scotland’s most important sectors.
Research by UK Hospitality indicates charging tourists £2 per night could result in a reduced visitor spend of around £94m a year in Edinburgh.
If the figures are extrapolated to cover Scotland as a whole, the calculated loss of visitor spending would rise to a “potentially catastrophic” £205 million.
Willie Macleod, executive director of UK Hospitality, said this showed the “very real damage that the introduction of a tourist tax could bring to Edinburgh and to Scotland as a whole”.
He added: “At a time of significant economic uncertainty, one of the highest rates of VAT in the world, and being ranked 135 out of 136 in terms of tourism price competitiveness, Scotland should be doing everything it can to attract tourism and spend, not pushing us further out of reach.
“The survey carried out by Marketing Edinburgh on behalf of City of Edinburgh Council highlighted that ‘just’ 3% of people wouldn’t come to Edinburgh if a tax were to be introduced.
“Our own findings concur, but what CEC conveniently neglected to state was that this 3% would result in a reduction in spend of around £57m per year – three times the amount that the proposed tax would generate in income.
“These figures simply cannot be ignored and I would once more urge the Scottish Government, as part of their own considerations into a tourist tax, to heed the warnings that these figures represent.”
UK Hospitality said data suggested 14% of visitors would spend less if a tax was introduced, while 3% more would stay outside the city.
This would bring the total loss of spend to around £94m, the association estimated.
Brigid Simmonds, chief of the Scottish Beer & Pub Association, said the levy would add to the sector’s challenges while Edinburgh Council leader Adam Mcvey has pointed to Paris, Berlin and New York as levying tourists but remaining popular.