THE Scottish tourism industry has reacted with fury to the launch by City of Edinburgh Council of proposals for a tourist tax, brandishing claims the sector had been consulted as “completely unfounded”.
The Edinburgh council formally released its consultation on a transient visitor levy (TVL) yesterday, under which it proposes to charge a tourist tax of either two per cent of a room charge or £2 per room per night.
Many hoteliers are strongly opposed to a tourist tax, stating the addition of a further levy will make Scotland less attractive to UK and overseas visitors. With VAT (value added tax) charged at 20 per cent, and recent hikes in business rates, they say the UK is already one of the most heavily-taxed visitor destinations in the world.
As reported in The Herald on Monday, hoteliers around Scotland are seeing margins being continually eroded because of soaring costs such as the apprenticeship levy, rising pay and increasing utility bills – despite the weakness of sterling sparking a rise in overseas visitors.
Marc Crothall, chief executive of the Scottish Tourism Alliance, said the Edinburgh plans have been made without entering into any dialogue with the industry – despite claims to the contrary.
He said: “Some of the declarations that have been made implied they have already consulted with many in the industry are completely unfounded. As a national trade body for the industry, the first time that we received any formal invitation of communication with Edinburgh council direct was a letter I received from Andrew Kerr, the city chief executive, last Thursday, asking if his offices might contribute to our national conference next week. I found it quite bizarre that an organisation of that magnitude would assume that we would just move our agenda for a national conference to accommodate an Edinburgh council matter, when they had yet to make any effort to engage with us prior to that.”
Mr Crothall’s stance was echoed by Willie Macleod, executive director of UKHospitality, who said the trade body was “outraged by the sheer lack of meaningful consultation that has taken place to date. “
He added: “City of Edinburgh Council has singularly failed to engage with or listen to the informed views of an industry that understands its consumers. It is ignoring the Scottish Government’s consistently stated position that it has no plans for a tax on tourists and that the interests of the hospitality and tourism industry must fully be taken into account through consultation.”
Outlining the industry’s opposition to a tourist tax yesterday, Mr Crothall said the move posed a threat to Scotland’s biggest source of tourists – the UK itself. The domestic market accounts for around 60% of visitors to Scotland and Mr Crothall said a further tax would force many to revise their plans, especially with UK household budgets under pressure.
Mr Crothall said it was time for the Scottish Government to take the lead on the issue.
“This is a national conversation, it is a national discussion,” he said. “It is not just Edinburgh-specific. While the current tax regimes exist, in terms of VAT and all of the other business rates levelled, the Scottish Government needs to lead the conversation and engage absolutely in transparent research into what could be the true impact of a tourism tax to the wider economy.”
Unveiling the consultation, the City of Edinburgh Council said it expects to raise at least £11 million per year from the levy, which would be used to invest in tourism-related services
Council leader Adam McVey said: “Public consultation will allow for a wider and transparent debate over important details with everyone who has a view and we believe this approach is an important component of gaining trust and support for the scheme. We continue to believe that a TVL is in the best interests of our residents, our tourism industry and those who visit us, and we fully expect the robust, professional approach we are taking to achieve a positive result for the capital.”
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