Bringing in a bed tax for visitors to Edinburgh would be “suicidal” for Scottish tourism, industry leaders have warned.
The Scottish Tourism Alliance fears councils will press for similar schemes to be rolled out across the country if it is introduced in the capital.
The body is confident the Scottish Government will reject any bid to introduce a new levy in Edinburgh which would shore up funding cuts for the city’s festivals and its dedicated marketing agency.
The Scottish Government has rebuffed previous efforts to introduce any form of visitor levy in Edinburgh. But council leaders hope they will be handed new powers through a “City Deal” being negotiated at Holyrood and Westminster.
Marc Crothall, chief executive of the STA, which was holding its annual conference in Edinburgh, said: “Solutions need to be found to be able to fund destination promotion activity – that has to happen. But you cannot pass a direct tax onto a tourist. It would be suicide for the industry when the UK already sits near the bottom of the table when it comes to price competitiveness. To start saying ‘tourist tax’ is a very poor message to send out.
“Edinburgh would not be the only city in the UK to do this. The moment one authority introduced it the rest would follow suit. It would start at £1, the next year it would be £2 and then it would be £5. Where are the guarantees and assurances on what that money will be spent on? If common sense prevails this will not happen.”
Tourism minister Fergus Ewing said a possible bed tax was one of several “fiscal midges” facing the industry, along with VAT rates and air passenger duty, which are already among the highest in Europe.
He added: “The Scottish Government has been very clear that, with the existing burden of VAT, air passenger duty and business rates, we have no plans to add any new tax burdens to the tourism sector.”
Ufi Ibrahim, chief executive of the British Hospitality Association, said: “We need to make sure that all people working in government – be they in Scotland, in Westminster or in local government – remember that before they start talking about additional local taxes that we cannot play too much with prices as an industry. We don’t wish to give the cash cow cancer and we certainly don’t want to give it cardiac arrest.”
Bernard Donoghue, director of the Association of Leading Visitor Attractions, told delegates: “We’re already an expensive destination in the world. Anything that makes us a more expensive destination is not welcome.
“I’ve yet to see an example of bedroom taxes being used to seriously support tourism promotion, infrastructure or development anywhere in Europe. They also penalise the people who are spending the most amount in the tourism economy.”
City council leader Andrew Burns said: “While an agreement is still be made, talks with ministers are certainly still ongoing and form part of our City Deal negotiations. We remain hopeful.”