A ‘Transient Visitor Levy’ – a so-called Tourist Tax – would not deter tourists from visiting the Capital, according to research published today by the City of Edinburgh Council.
The findings point to a strongly performing hospitality sector with some of the highest occupancy rates in Europe that, in line with other popular international destinations, could comfortably absorb the impact of a small price rise.
It is estimated that a charge of £1 per person per night could generate over £11 million each year but, depending on the mechanism used, the additional income could be as high as £29 million.
The desk-based exercise, which examined the Edinburgh accommodation sector, the policy context, and examples of a similar TVL in other cities, also highlights ways in which the revenue could be invested into local services to the benefit of residents, visitors and the tourist industry itself, such as investing in parks, public spaces, clean streets and reduced ticket prices for cultural attractions.
The research was announced yesterday – coincidentally the same day leaders of all 32 Scottish Local Authorities agreed to launch a campaign to secure the legal power for local government to implement a levy. This signals increasing support across the political spectrum for the principle of local discretion to propose and implement a TVL.
The Council has long campaigned for the powers to introduce a TVL and this research, which will be debated by councillors at a meeting next Thursday (31 May), is designed to support further engagement with key stakeholders and the development of a detailed proposal to be presented to the Scottish Government later this year.
Next steps in building the case include a round-table discussion with industry stakeholders to discuss the details of what an Edinburgh scheme could reasonably look like and options for implementing it, followed by further research into the views of residents and visitors, conducted during July and August in partnership with Marketing Edinburgh.
Council leader, Adam McVey, said: “First of all, it is important to point out that this would not be a tax on business; rather a small contribution by tourists towards the services they use during their stay with us. Edinburgh welcomes millions of visitors each year who bring investment, diversity and energy to our city but they also bring a cost in terms of the impact on our core services.
“This research demonstrates that not only is a TVL unlikely to adversely affect Edinburgh’s hotel 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 but I can assure them that this is only the beginning of a considered, thoughtful and professional engagement with our partners across the tourist and hotel industry, the people of Edinburgh and the tourists who would ultimately pay the levy.”
Deputy leader, Cammy Day, added: “Clearly, in order to sustain the most successful hospitality sector per head in the world, we need to continue to invest in the areas that make the city a success story – and we know from previous engagement work that the principle of a TVL enjoys broad support amongst residents and the cultural community as a means of contributing to this.
“We will publish further details of our proposals in the coming weeks and I would encourage everyone with an interest in this to take the opportunity to consider the information we are presenting and to have a voice in the debate.”
John Donnelly, Chief Executive, Marketing Edinburgh, said: “We need to find a solution that balances Edinburgh’s growing tourism demand against our shrinking public budgets. Transient Visitor Levies are used widely throughout the world and to great effect, raising significant amounts of money. These funds are then able to be reinvested into public services, to the benefit of both residents and visitors.
“If it works for Paris, Amsterdam and Rome, then why not Edinburgh? The amount contributed per visitor is tiny – it would have no impact upon our increasing visitor appeal. Indeed, I’m unaware of evidence that would indicate anything other than a positive effect on the city.
“Over the coming weeks and months, it is important for us to learn from others, to come together and to explore the best possible case for TVL.”
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