Edinburgh would be at risk of becoming the most expensive destination in Europe if plans for a tourist tax are given the green light, research by UKHospitality has shown.
The Scottish capital could overtake the likes of Paris, London and Rome to become the most expensive city to visit as well as boasting one of the highest taxed tourism sectors in the world, the industry body has said.
According to the World Economic Forum, the UK currently ranks 135th in terms of overall price-competitiveness.
Willie MacLeod, executive director Scotland for UK Hospitality, said: "A Transient Visitor Levy (TVL) could be a disaster for the tourism industry in Edinburgh and across Scotland. The introduction of a £2 per room, per night tax will cost the economy between £175m and £200m per annum. At this a time of great economic and political uncertainty, much needed jobs, tax revenues and investment will be put at risk."
UKHospitality has submitted its evidence to the Scottish government, which would have to pass legislation to allow City of Edinburgh Council to press ahead with plans for the levy.
Data collected by STR Global in 2018 showed that 15% of Edinburgh visitors would reduce their spending as a result of the tax, 5% would stay outside the city and 2% would not visit at all.
Such a change in behaviour could result in a total decline in visitor spend in Edinburgh of £94m a year. If mirrored across Scotland, it could result in a decrease in visitor spend of £205m a year.
MacLeod added: "Our members, who represent the majority of people in the hospitality and accommodation sector, remain opposed to the introduction of any additional tax on visitors. Instead, the Scottish government and local authorities should continue to work with the industry, to expand the sector and secure further jobs and investment.
"UKHospitality member businesses have invested significantly in Scotland, employ tens of thousands of people and cater for millions of overnight guests each year, contributing to the vibrancy and range of services available in our town and city centres."Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).