Council consultation reveals clear support for tourist tax in Edinburgh

Written by Jenni Davidson on 9 January 2019 in News

Figures show 85 per cent of respondents to the council consultation on a transient visitor levy support the scheme

Edinburgh skyline - Image credit: Andrei-Daniel Nicolae via Flickr

Plans to introduce a tourist tax in Edinburgh have the backing of the vast majority of the public, a consultation by the City of Edinburgh Council has found.

Figures show 85 per cent of respondents, including a majority of the city’s businesses and accommodation providers, are in favour of introducing a transient visitor levy (TVL), or tourist tax, in the capital.

The council estimates that the proposed scheme could raise between £11.6m and £14.6m per year for the city, but some business groups have warned it could have an impact on other revenue from tourism.

The scheme has extremely high support among residents, with 91 per cent in favour, while only just over half – 51 per cent – of accommodation providers who responded to the consultation were behind it.

However, nearly three-quarters of respondents (72 per cent) agreed with City of Edinburgh Council’s proposed rate of £2 a night or two per cent of the cost of accommodation, while another 19 per cent felt this was too low.

More respondents preferred the option of a flat rate per night rather to a charge based on a percentage of the room cost, and 81 per cent wanted to see at least a seven-day cap on the charges.

Over 2,500 responses were received during the eight-week public consultation, which was held at the end of 2018.

The council has said that it will now put together a final proposal on how it hopes to take forward a TVL scheme for approval by councillors in February.

It  will then be passed on to the Scottish Government, which would need to approve any scheme as councils do not currently have the power to introduce a tourist tax.

Commenting on the consultation results, City of Edinburgh Council leader Adam McVey said: “Once again, we are finding that there is a huge swell of support for a tourist tax in Edinburgh with residents and all types of business backing a scheme that is fair, sustainable and one which would be reinvested into the ongoing success of our tourism and hospitality industry and the services which matter most to local people.”

With over 4.5 million visitors coming to the Scottish capital every year, spending over £1.8bn, McVey said the tourist economy was “extremely strong and expected to continue to grow”.

He continued: “A majority of businesses agree the vibrancy of our industry wouldn’t be threatened by a small levy but would benefit from the additional investment.

“Interestingly, this includes more than half of accommodation providers, dispelling fears in certain quarters that the industry wouldn’t support a TVL.

“As a council, we have a strong track record of investing in and supporting our cultural offering and heritage, but as the demands on our city increase, we will need a secure additional source of funding to sustainably invest in and manage the impact of this growth.”

Depute council leader Cammy Day said: “These results add yet more weight to the case for a TVL in Edinburgh and demonstrate how our plans not only have the support of residents, but the backing of accommodation providers and many others in the tourism industry as well.”

COSLA president Alison Evison said: “This is important news and certainly strengthens the case for the introduction of a local tax – to address local issues – in this case a transient visitor tax for Edinburgh. 

“This is hard evidence from a consultation that shows an overwhelming appreciation of the potential benefits of a discretionary tax.”

The consultation follows surveys by Marketing Edinburgh and Edinburgh Chamber of Commerce, which also found majority support for a tourist tax among residents and businesses.

However, bodies representing tourism businesses in Scotland remain opposed to the scheme.

The Federation of Small Businesses (FSB) called the consultation an “interesting contribution to the ongoing debate” on the merits and drawbacks of a tourist tax.

FSB development manager for the East of Scotland Garry Clark said: “Edinburgh businesses will want to digest these consultation results but many may ask how it addresses evidence suggesting that even a three per cent drop in Edinburgh’s visitor numbers could result in a £42m drop in the benefits of tourism to the city.

“As the council doggedly pursues these proposals, businesses will reasonably expect detail on which firms would have to administer such a tax and what say they would have over how revenues were spent.

“All of this must also be viewed from the context of how such a tax would impact the tourism industry in Scotland as a whole.

Ultimately, tourism is currently a Scottish success story – and we must not do anything to undermine this vital industry.”

The Scottish Tourism Alliance (STA) called the results “ambiguous” and questioned how representative the consultation was because the majority of responses had come from residents, with only 17 per cent from businesses and just seven per cent from tourist accommodation providers.

The STA said: “Figures show that only 87 Edinburgh accommodation providers have indicated strong support for a transient visitor levy within the consultation and it is unclear from the figures released by the City of Edinburgh Council what type of accommodation providers these are. 

“This number represents less than five per cent of all tourism businesses in Edinburgh (1785).

“Out of the 435 total number of businesses that responded to the consultation, it is unclear what sectors or areas all of these businesses are in, for example, how many of the 162 ‘Other Edinburgh business including visitor attractions’ are actually visitor attractions, retail businesses or other business that  directly benefit from tourism spend?

“Greater transparency is required and we will be seeking clarity from Edinburgh City Council to better understand the results of the survey and pose questions that we and other member trade associations have as a result of today’s announcement.”

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