A new report on the Transient Visitor Levy (TVL) said Edinburgh’s strongly performing hospitality sector, which has some of the highest occupancy rates in Europe, could comfortably absorb the impact of a small price rise.
The desk-based exercise looked at the Capital’s accommodation sector and how a tourist tax worked in other cities.
It recommended the tax should apply across the range of accommodation options – hotels, serviced apartments, B&Bs, guest houses and Airbnb-type properties.
But it did not consider imposing a levy on tour operators, retail units, transport companies, restaurants or bars.
The report estimated the revenue which could be raised by a range of different charges. A dollar (72p) per night per room would bring in £4.9m; £1 per night per room would produce £6.8m; but if it was £1 per night per person that would be £11.5m; three per cent on the cost of a room would bring in £17.4m; and five per cent £29.1m. The report said: “The most favourable option for visitors would be the percentage room cost option as it would have had less impact on budget tourists or off-season trade.”
It also highlights how the money could be invested in local services to the benefit of residents, visitors and the tourist industry itself – such as investing in parks, public spaces, clean streets and reduced ticket prices for cultural attractions.
Council chiefs have been pressing for the power to introduce a tourism tax for some time. The report will be debated by the council next week. It then plans further engagement with stakeholders and to develop a detailed proposal to be presented to the Scottish Government.
Council leader Adam McVey said: “First of all, it is important to point out that this would not be a tax on business; rather a small contribution by tourists towards the services they use during their stay.
“This research demonstrates that not only is a TVL unlikely to adversely affect Edinburgh’s hotel industry, but that handled correctly, it can help to secure the ongoing sustainability and health of tourism in the city.
“I understand that there are those who remain to be convinced but I can assure them that this is only the beginning of a considered, thoughtful and professional engagement with our partners across the tourist and hotel industry, the people of Edinburgh and the tourists who would ultimately pay the levy.”
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