Claims of growing support for Edinburgh tourist tax ‘absolutely not true'

30 August 2018 by
Claims of growing support for Edinburgh tourist tax ‘absolutely not true'

Claims of growing support for a tourist tax in Edinburgh have been dismissed as "absolutely not true" by operators, tourism bodies and trade organisations.

The backlash followed claims from city council chiefs that support had increased after Airbnb and Virgin Hotels both said they were happy to operate a Transient Visitor Levy (TVL).

The so-called ‘bed tax' would see a £1 charge on tourists staying in the city, which would generate around £11m a year, according to Edinburgh City Council.

Council leader Adam McVey told The Caterer: "I've found a great deal of support in the industry amongst those who understand the benefits this levy could bring to Edinburgh in helping to sustain, manage and grow our tourist economy."

But Russell Imrie, managing director of Queensferry Hotels and a member of the Edinburgh Hotels Association, said: "It is absolutely not true that support for a tourist tax is on the up from hoteliers."

He added: "Proponents of a tourist tax are communicating in an opaque and less than transparent way. It is often quoted that hotels are ‘coming around' to a tourist tax or that it is gaining support, yet no evidence of this is ever communicated."

Imrie described the TVL proposal as "inequitable" because it targets hotels, which he said are already managing a high local taxation burden as a result of property rates.

"It is property taxes that should be funding local services," he said. "Property taxes are paid by all businesses who benefit from tourists, and not just by hotels.

"Hotels are not excessively profitable businesses that have the headroom for additional taxes and the administration costs of collection. Such additional taxes may not be able to be passed onto guests and would need to be absorbed by the hotel, making them less profitable and limiting reinvestment."

Last month the Scottish Tourism Alliance (STA) released a statement - which was co-signed by 22 organisations, including UKHospitality (Edinburgh, Glasgow & Inverness Hotels Associations), the Federation of Small Businesses (FSB), the Scottish Bed & Breakfast Association, and the Scottish Beer & Pub Association - that welcomed the Scottish Government's position that it would not legislate to grant powers to local authorities to introduce a TVL.

Meanwhile an FSB poll found that 76% of Edinburgh businesses oppose the introduction of a tourist tax while 73% believe it would have a negative impact on the local economy. And according to the organisation, there has not been enough information about the proposals to convince its members otherwise.

Garry Clark, FSB development manager - East of Scotland, said: "Businesses have a number of unanswered questions about how such a tax would operate, such as what rate the charge would be levied at, how they would be expected to collect and administer it, whether VAT would be levied on top of it, and - not least - how revenues raised would be spent."

Marc Crothall, chief executive of the Scottish Tourism Alliance added: "Hoteliers and indeed all tourism businesses in Scotland are facing uncertain times ahead as we move closer towards our EU departure date and an unknown economic landscape. The Scottish Tourism Alliance has been collecting evidence over the past month to get an insight into the costs of doing business for hoteliers and what is being reported to date is that most businesses are seeing profits erode thus putting even greater pressure on the ability to invest in their product and their teams. This also limits their capability of continually improving the quality of the offer that guests expect today; some are even reporting up to 40% increases in energy not to mention the significant increases in rates for large business that don't qualify for the welcomed rates cap of the past two years.

"What our tourism industry, especially the hotel and accommodation sector needs, is a time of stability and the opportunity to strengthen and grow, not the threat of an additional cost to our visitors in an already highly taxed environment."

But McVey insisted that the council is working hard to answer these concerns. He said: "I've met a number of representatives bodies and individual hoteliers based and operating in Edinburgh. Those businesses have raised legitimate issues which we are continuing to resolve through dialogue with the industry."

Edinburgh's potentially ‘disastrous' tourist tax to be decided within a year >>

Scottish Tourism Alliance: bed tax plans require national debate >>

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