Proposals for a tourism tax in Edinburgh have been branded "unwanted and potentially damaging" as a survey of local businesses reveals a majority were opposed to the plans.
The Federation of Small Businesses (FSB) surveyed 124 businesses in the city, with 94 (76%) stating they were against the introduction of a levy on tourism and 73% saying they thought it would have a negative impact on the local economy.
The city council is currently drawing up a business case for a proposed tax with the aim of persuading the Scottish Government to hand over the necessary power to introduce it.
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The draft proposals are expected to be revealed this summer with a consultation with local businesses to follow.
It is estimated that visitors spend £1.46 billion each year in Edinburgh, supporting around 34,800 jobs.
Janet Torley, FSB area leader for the east of Scotland, said tourists must be valued and not "priced out" of the city.
She said: "This is a wake-up call for the City of Edinburgh Council, signalling that its plans to introduce a tourism tax in the city are unwanted and potentially damaging.
"Despite the caution which the Scottish Government has urged over this tax, the city council has pressed ahead with the development of a 'business case' for its introduction. Now it is clear that the overwhelming opinion of local businesses is 'no'.
"Edinburgh is at the very heart of Scotland's tourist industry - it is our most visited city, it has our busiest airport, and it is home to some of our most iconic landmarks.
"Edinburgh's success as a magnet for international tourists is vital to the economic health of visitor economies right across the country.
"If we tax tourists out of Edinburgh, then we risk taxing them out of Scotland, damaging the prospects of small local businesses throughout Scotland and threatening jobs."
The plans have drawn criticism from other industry bodies, including the Scottish Tourism Alliance (STA) and the Association of Scotland's Self-Caterers (ASSC).
READ MORE: Edinburgh thrives as it defies fallout from financial crisis
Marc Crothall, STA chief executive, said: "The STA recognises the need across most destinations for an increased level of long- term sustainable investment, however applying a further cost to visitors is, in our opinion, not a sensible approach to take.
"The need for Scotland to become more competitive as a destination for visitors to travel to and spend money in is now greater than ever in relation to our impending exit from the EU.
"Any such visitor tax/levy being applied is counterproductive and could have a potentially devastating long-term impact on Scotland's tourism industry and local economies."
Fiona Campbell, ASSC chief executive, said a tourism tax would "threaten the existence of many small businesses" in the sector.
John Donnelly, Chief Executive of Marketing Edinburgh, said: “Finding a sustainable way to invest in the city whilst balancing the needs of our residents, our tourism industry and the wider business community is crucial to our future. We must protect Edinburgh’s position as one of the most desirable destinations in the world – and the more we invest, the more we grow, to the benefit of all.
If we are to identify the right solution, it is important to keep an open mind. We need a clear, balanced and thoughtful debate, considering the merits and disadvantages of every option. That means nothing should be off-the-table at this stage - we must seriously contemplate a levy as a potential solution and explore the positive impact its introduction could have.”
City chiefs defended proposals for the tax.
Council leader, Adam McVey, said: "We have long held belief that a Transient Visitor Levy is in the best interests of our residents, our tourism industry and ultimately also those who visit our beautiful city.
"The substantial research we have done demonstrates that not only is a TVL unlikely to adversely affect Edinburgh’s accommodation industry, but that handled correctly, it can help to secure the ongoing sustainability and health of tourism in the city.
"I understand that there are those who remain to be convinced that this would be a positive move and would be of benefit to us all. I can assure them that this is only the beginning of a considered, thoughtful and balanced debate with industry leaders, the people of Edinburgh and those who visit us."
He added: "With some of the highest visitor numbers in the UK, we already experience incredible pressure on our resources and services to meet the demands from tourism. These numbers are projected to grow still further, and in an environment where public spending continues to shrink across the piece, we must consider more sustainable ways of securing long term investment that are fair to all.”
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