With the advent of the power granted to Scottish councils to introduce a visitor levy charge, I would urge councils to think very carefully if it’s in their best interests to introduce a scheme in their area.

Whilst tourism charges are routinely applied in many parts of the world, councils must carefully consider the destination’s price competitiveness. There is a price tipping point for every customer, even the high-spending US market. 

Quality of experience and value for money go hand in hand. With destinations around the world becoming more attractive, accessible, and affordable, electing to add more cost onto a visitor’s bill carries substantial risk. Scotland and the UK are already a heavily taxed visitor destination.

We mustn’t forget that this charge will apply to Scottish residents or even those residing from the same local authority area. We have seen this year that the high cost of holidaying at home and poor weather has given rise to a downturn in domestic visits and visitor spend. For those who come from further afield to visit for leisure or business, their expectations are high when it comes to quality versus price.  

Although many in the sector welcome a levy, it must be set at a fair percentage level so it doesn’t deter visitors staying and must deliver a noticeable positive impact for the industry, the destination, and the visitor.

Unlike the busy streets of Edinburgh, many parts of Scotland continue to find it difficult to attract visitors to their destination and a visitor levy charge would make it even more challenging for them to secure overnight bookings.

At the end of the day, this will also be a further cost and time burden on accommodation business, particularly small businesses, who are already under great pressure. There is the added complication that rather than charging a flat-rate, the levy will be based on a percentage of the accommodation bill, which is set by individual local authorities.

For the many micro business who choose to trade below the £90,000 VAT threshold, this additional fee charged on top could result in reaching this threshold sooner and then having less availability of rooms to sell. For some, this change may be a step too far and they decide to stop trading altogether.

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Councils need to consider these impacts very carefully and how they can support the businesses collecting the levy on their behalf, by exempting those who fall into this bracket and factoring in business cost recovery.

Importantly, due to constructive engagement by Scottish Government with the Scottish Tourism Alliance, this will not be a charge that the councils can hurriedly introduce without undertaking a thorough consultation process and adhering to statutory guidance, which the sector has had a central role in developing. The earliest point at which any levy could be collected would be July 2026.

Consultation with the tourism industry and key stakeholders must take place throughout an 18-month period and beyond, while councils must by law establish a Visitor Levy Forum with representation from businesses, tourism organisations and communities to advise on the visitor levy scheme.

The creation of this forum was among our key asks from the beginning, providing a crucial safeguard in ensuring the sector has a central role in informing how the monies raised are best spent in their areas.

The legislation passed makes it very clear that the monies must be focused on enhancing the visitor experience and crucially treated as incremental spend over and above existing council budgets, which we know are squeezed.

For example, the levy revenue raised is an opportunity to financially safeguard our Destination Management Organisations, which play a critical role in both the promotion of the regions and co-ordinating and managing tourism locally.

The visitor levy is often touted as a ‘silver bullet’ to address local and national funding shortfalls in areas like affordable housing and culture, but there is a risk that these monies could be spent many times over.

If we are to achieve our national ambition to be a ‘world leader in 21st century tourism by 2030’, then councils need to think how best to strategically and creatively deploy the revenue raised rather than fill potholes, reopen public toilets, and empty bins.

We must ensure that the visitor levy where collected is used as a force for good that boosts the tourism and hospitality industry and enhances the quality of experience, rather than ends up as just another tax on our visitors and businesses.

Marc Crothall is chief executive of the Scottish Tourism Alliance