Fringe benefits: Edinburgh’s visitor levy goes some way to addressing the impact of overtourism

As this year’s Fringe draws to a close, we Edinburgh curmudgeons can breathe a sigh of relief knowing we’ve got our city back just as we like it – with only modest levels of overtourism. Judging by the state of the pavements and the death-defying acts of chicken needed to overtake dawdling visitors, this summer’s festivals were as popular as ever. 

That’s good news, obviously, for the city but it’s also welcome reassurance that the visitor levy aka the “tourist tax” which came into force in late July has not killed tourism stone dead as some of its biggest opponents suggested it might.

Edinburgh became the first city in the UK to introduce such a levy, an additional five per cent tariff on the first five nights of any overnight accommodation. 

Other popular world cities have had similar levies in place for some time, such as New York where visitors are charged $3.50 per person per night in addition to a near 15 per cent tax on bookings, or Paris where charges range from €2.60 per person per night for the most basic of lodgings to €15.60 for palaces.

The council estimates the visitor levy will bring in roughly £50m a year, a relatively small amount for a city with a £1.5bn annual budget which faces a housing crisis and has a transport system badly in need of further modernisation. 

But there are tangible benefits for the people who live here all year round – not something that’s always apparent from tourism – with the levy already funding a new city centre policing unit and helping to secure the long-term future of Leith Theatre, allowing it to open as a permanent, year-round cultural venue. That’s important because while tourism might be good for the overall economy not just of Edinburgh but Scotland as a whole, it is often a double-edged sword for those who live and work in the country’s most-visited places. 

Not everything has gone smoothly, however. The Scottish Tourism Alliance (STA) has reported problems with the percentage model, with some hotels having to correct individual guests’ bills after mistakes made by booking platforms. The STA said the requirement to remove all non-accommodation elements like breakfast charges from the final bill was creating additional work and complexity. While this is hopefully just an early teething problem, the organisation has urged Highland Council to pursue a fixed-fee model when it introduces its visitor levy.

“We need to know what happens to the rest of a visitor’s spend when they are paying the levy,” said STA chief executive Marc Crothall. “Are they spending less when they go out for dinner? Are they spending less in shops and attractions? Are they shortening their stay? Are they booking fewer Fringe shows? We need real-time information to get a true picture of whether the money raised from a visitor levy outweighs the negative impact on the wider visitor economy.” 

Another immediate worry for Edinburgh must be the concerns being raised about the levy’s impact on performers coming to the capital during August and throughout the year. 

Earlier this summer, Scottish Ballet said it had been forced to cancel performances of its festive show Cinders! between Christmas and New Year due to the cost of its performers staying in the city. The Glasgow-based national dance company said the cost of accommodation in Edinburgh had increased by more than 70 per cent between December 2019 and 2025, leaving it with an annual bill of more than £200,000. 

Just as they do every year, Fringe promoters and venue owners have urged the council to do more or risk killing the goose that lays the golden egg. But short of offering a scheme which provides some sort of relief from the visitor levy for bona fide performers – a serious suggestion which merits further investigation – what can the council do? And why should the Edinburgh taxpayers be forced to further subsidise the festivals while international hotel chains and Airbnb owners continue to price gouge, effectively charging whatever they want? 

The chief executive of the Fringe Society is among those calling on the council to plough more of the visitor levy back into the festivals, reportedly branding its treatment of the Fringe “iniquitous” when compared to other events such as the Tour de France, the opening stage of which takes place in Scotland next year. 

But there is more to Edinburgh than the Fringe. More than simply being a place visited by tourists, this is a city where people live, go to school, go to work. 

The much-needed injection of cash from the visitor levy will not fix all the city’s problems overnight but just as in other places around the world with similar schemes, it will help share the benefits of tourism to those who live here all year round.