Leading tourism and hospitality groups – including the SLTA – have written to Edinburgh City Council outlining their opposition to its proposal to introduce a tourist tax.
In a letter to council leader Adam McVey, 10 hoteliers and trade association representatives have said that it would be “hugely damaging” and drive visitors away, reducing the city’s income and costing £45 million.
The SLTA, in its own separate response to the council, points out that due to the questions contained within, and the format of, the Edinburgh City Council Transient Visitor Levy (Tourist Tax) online consultation there is little opportunity to make any comments opposing the introduction of a TVL in Edinburgh.
Colin Wilkinson, SLTA managing director, states: “The consultation is biased in the extreme and pre-supposes there is/will be nothing but supportive responses for the imposition of a TVL. In fact, the road map of questions is so skewed that, in our opinion, it is endeavouring to guide respondents to reach only one conclusion – to support the introduction of a TVL in Edinburgh.”
In a series of points, he writes:
Having attended one of the Edinburgh City Council TVL consultation meetings, I was struck by the comment from one of the council representatives that the council was not getting its fair share of revenue from tourist spend in the city. Our group was informed that to address this burden of cost on the council, no other model other than one based on a TVL for accommodation providers, who were financially benefiting from the council services provided and enjoyed by tourists visiting Edinburgh, had been considered. Apparently a variety of options was discussed, but it was ascertained that the council was “too far down the road to look at other options”.
Surely the council realises that many business sectors, other than accommodation providers, benefit from tourist spend so any TVL should not be solely directed at this sector. Targeting accommodation providers is disproportionate when other sectors have a greater impact on resources and the city.
Alcohol licensed accommodation providers already pay a disproportionate level of commercial rates compared with any other business sectors and already contribute to Business Improvement Districts and other initiatives to attract tourists to the city. What other sector contributes 8.5% of its turnover in commercial rates?
This same sector also pays licensing fees to the council. In 2017, the Edinburgh Council Licensing Board reported a £104,995 surplus. In 2008, the first year of operation of the new Licensing Act, the same council licensing authority reported a surplus of £233,000. Figures for the years in between are, not surprisingly, hard to come by. Based on the two years’ figures stated above, it would be fair to assume surpluses have been recorded each year, yet this system is supposed to be cost neutral. Where has this additional income been directed to in the council’s budget?
Any TVL will mean additional costs for UK and foreign visitors (60% of visitors to Scotland are UK based). To suggest that an additional TVL should be added and would be acceptable, is not comparing like for like and would make Edinburgh less competitive in attracting tourists. Overnight accommodation in the UK already attracts 20% vat – one of the highest in Europe – and while the UK is ranked in the top five of 136 countries in terms of tourism capability and readiness, in terms of price-competitiveness, the UK is listed a very poor 135th.
Will cruise liners be charged a TVL? Already there are reports that MSC cruises will no longer stop over in Amsterdam due to a new tourist tax being imposed.
Only about a quarter of visitors actual stay overnight in the capital. What about the vast majority that visit the city, but do not book accommodation and perhaps stay outwith the city and avoid any TVL, yet still place a burden on the city’s services and infrastructure?
In the council’s presentation on a TVL and its current position on the resources raised, it states that respondents were asked for a number of priorities from additional areas of spend and this included transport, theatres, museums, galleries, additional events or festivals. Why are these venues not being included in any proposed TVL? These are the ones that will directly benefit.
One of the priorities listed was “Council Services in General”. Any TVL introduced should not be used to offset council reductions in general services. Promises of ring-fencing revenue raised to promote tourism means nothing unless it is “additional funding” and not an avenue to deliver council budget cuts.
Administration of a TVL scheme is another issue. How will this be funded? Who will be responsible for the administration? Will a mandatory registration scheme need to be set up to enforce compliance?
How will the level of a TVL be set in the future?
In the joint letter, the tourism and hospitality groups states that introducing a transient visitor levy (TVL)/tourist tax in the city “would be hugely damaging to the tourism and hospitality sector and undo much of the positive work that the council has done to promote the city as a thriving tourist destination”.
It points out that any imposition of a tourist tax on consumers will “inevitably lead to fewer visitors and lower spending, affecting jobs and investment”.
The letter states: “The tax proposed in Edinburgh will cost that city’s economy £45 million – £175m if implemented across Scotland.
“Hospitality is critical to the Scottish economy, directly employing 275,000 people and supporting about 30,000 jobs in Edinburgh. Total tourist spend in 2017 from Edinburgh visitors was £1.5 billion. A visitor levy would have far-reaching implications in terms of our attractiveness as a destination as well as diminishing overall spend.
“Edinburgh council’s consultation ignores the fact that VAT on accommodation in Scotland (and across the UK) is much higher than virtually all other EU countries, including those which levy some form of tourist or bed tax – the UK is one of only three EU countries not to apply a reduced rate of VAT to accommodation and tourism services.
“The hospitality sector pays hundreds of millions of pounds in business rates, making a huge contribution to local authority services across Scotland, proportionately overpaying by more than any other in relation to revenue.
“The consultation by Edinburgh council pre-supposes support both for principle and the imposition of a tourist tax, support for which does not exist within the hospitality sector.
“Helpfully, the Scottish Government has intervened to hold a national conversation on the issue and we are engaging in that process. It is, however, important that Edinburgh council does not pre-judge the outcome of that process.
“Edinburgh council needs to heed the voice of hospitality, drop its proposals and work with the sector to develop a dynamic and customer-focused strategy that will help keep the city – and Scotland as a whole – at the forefront of global destinations.”
The letter is signed by:
Colin Wilkinson, managing director, Scottish Licensed Trade Association; Kate Nicholls, chief executive, UK Hospitality; Calum Ross, chair, UKH Scotland; Rob Paterson, chief executive, Best Western Hotels Great Britain; Russell Imrie, managing director, Queensferry Hotels and on behalf of Edinburgh Hotels Association; Angela Vickers, chief executive, Apex Hotels; Margo Paterson, chief executive, Scottish Youth Hostels Association; Richard Mayne, cluster general manager, Radisson Hotels; David Weston, chairman, Scottish Bed & Breakfast Association; and Fiona Campbell, chief executive, Association of Scotland’s Self Caterers.