Scotland’s plan to tax tourists gathers pace

The Scottish government has launched a public consultation on a bill to give local authorities the power to charge overnight visitors a “tourist tax” and invest the money in local attractions such as museums. 

Edinburgh is likely to become the first city in the UK to introduce such a tax, having voted in favour of a levy at a council level. The proposed amount is £2 per night for up to seven nights, which it is estimated will raise up to £14.6m a year.

A consultation conducted by the city council last year drew more than 2,500 responses, with 85% in favour of the tax. And research commissioned by tourism body Marketing Edinburgh found that 92% of tourists questioned said they would have visited Edinburgh even if they had been asked to pay a levy of £1 per room, per night.

In a scenario where the tax rose to £4 per room per night, 78% of tourists asked said they would still come. An equal number of visitors were in support of the levy as were against it (47%). 

Dozens of cities worldwide already redistribute money to counter any negative impacts of tourism and to help support cultural assets. This is often done via a fee added to the price of a hotel room. Visitors to Rome pay €3-€7, while in Budapest, they pay an extra 4% of the room cost.

A tourist tax has been mooted in other popular UK destinations, including York. Reyahn King, the chief executive officer at York Museums Trust, has previously said that a tax would be worth investigating if it might help maintain the quality of life in York by counteracting the impact the many visitors have on the city.

Any future Labour government is expected to be in favour of tourist taxes. Speaking at a Creative Industries Federation event in London earlier this year, Labour’s deputy leader and shadow culture secretary Tom Watson said the party was considering a tourism levy as a way for local authorities to raise funds to invest in tourist attractions. 

If the bill is passed in Scotland, local authorities will be able to decide whether to apply overnight fees. Any money raised will be retained by the authority to “invest in local tourism activity, helping to safeguard the sustainability of the industry”, according to Scotland’s public finance minister, Kate Forbes. 

Alistair Brown, the policy manager at the Museums Association, says a tourist tax to help fund museums and other cultural services is an attractive proposition, especially in areas where there is high tourist footfall. 

But he adds: “We shouldn’t regard the tourist tax as a panacea. First, because it’s difficult to get any kind of guarantee that the new funds will be spent on museums. And second, the benefits of such schemes will be felt unevenly across the country. “Even if it works in York or Edinburgh, would it work in places with fewer hotel beds?”