Business group claims visitor levy “risks more harm than good”

The Scottish Tourism Alliance (STA) has claimed that Edinburgh’s incoming visitor levy “risks more harm than good”, ahead of the levy’s formal implementation on Friday (JUL 24).

The STA describes itself as the “largest member organisation for tourism and hospitality businesses in Scotland.”

Coming into effect for overnight stays from and after 24 Jul, the levy will be a 5% charge on overnight accommodation for people visiting the capital.

The City of Edinburgh Council eventually expects to raise up to £50 million in revenue each year.

However, the STA shared its concerns about the potential impact on Scotland’s tourism and hospitality industry “at a time when businesses continue to face a mixed trading and economic environment.”

It added that the practical impact of the levy on visitor behaviour, demand and secondary spend “must be closely monitored before other local authorities commit to introducing their own schemes.”

Marc Crothall, chief executive of the STA, said: “Introducing a successful visitor levy scheme is about the right application, right place and right time, if it is to act as a force for good that enhances our visitor offering and appeal. 

“At the moment, it is the view of the majority of those in the industry that I have spoken to that none of these conditions of success is currently in place, and the introduction of a further charge on those who choose to visit and stay in a destination risks more harm than good.”

In a lengthy statement, Crothall added that one of the biggest concerns within the industry was its potential impact on how much tourists will spend once in the city, known as “secondary visitor spend”.

Businesses against the levy have argued that the added cost, which is added on to the bill of visitors, could reduce tourism and impact their commerce.

Crothall added: “Will it lead to some choosing not to stay over in Edinburgh or shorter stays, or will it result in people still coming but spending less in the destinations restaurants, pubs, shops, attractions and with other local businesses? 

“These are impacts we’ll be monitoring over the coming weeks and months and we will be expecting authorities to do the same.”

Other concerns listed by the STA include rising business costs, high rates of VAT in Scotland, as well as business rates.

While Edinburgh is the first Scottish city to implement a visitor levy following the passing of the Visitor Levy (Scotland) Act in 2024, it is not the only city to have agreed one, with Glasgow, Aberdeen, Stirling, and West Dunbartonshire councils all implementing a visitor levy in 2027.

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