Exclusive:Pressure mounts for tax on cruise ship passengers amid ship numbers boom in Scotland

The cruise industry in Scotland is expecting a record year amid calls to address the impact of high volumes of passengers felt on destinations and local infrastructure.

Pressure is mounting on MSPs to include cruise ship passengers in a proposed tourist tax given the rapid expansion of the sector and the impact of high numbers of passengers on destinations in Scotland.

Cosla, which represents local government across the country, said it wanted powers for councils to introduce a cruise ship levy “as soon as practically possible” given the “growing challenges” presented by the growing sector. Scotland has become a key cruise destination driven partly by the war in Ukraine and the loss of traditionally popular routes in the Baltic.

With port expansions at Stornoway and Aberdeen and investment at Greenock, more than a million cruise ship passengers are due to dock this year, with several key ports reporting record-breaking numbers of bookings. It has coincided with the arrival of ever bigger vessels, such as MSC Virtuosa – with 18 decks and accommodation for up to 6,334 passengers and 1,704 crew – at Lerwick last week.

The Maltese-flag MSC Virtuosa became the largest cruise ship yet to visit Lerwick Harbour when it arrived in the Shetland port on Monday on a maiden visit. Picture: Dave Donaldson

The Scottish cruise industry generates around £23 million for the economy and supports more than 800 employees, according to latest pre-pandemic figures. A Bill going through the Scottish Parliament proposes a visitor levy on those staying in certain types of overnight accommodation – but, so far, cruise ships have been excluded from the legislation.

If the cruise tax is approved, Scotland would follow cities such as Barcelona and Amsterdam in charging a cruise passenger levy, with Croatia also imposing a tax to raise funds for local services and infrastructure.

The calls come amid increasing concerns regarding the often unmanaged impact of cruise ship passengers in Scotland. While the economic benefit of the sector is welcomed, concentrated volumes of passengers disembarking for short excursions have caused issues in places such as Orkney – Scotland’s most popular cruise destination – with strains on local transport services and historic attractions reported.

A statement from Cosla said: “Cosla leaders continue to support the proposal for councils to have the ability to introduce a cruise ship levy as soon as practically possible. Cruise ship tourism is both a welcome source of revenue and a growing challenge for the services and facilities used by communities across our coastal councils.

"Across Scotland, overnight visitors staying on cruise ships access the same services and facilities as both visitors staying in accommodation such as hotels, as well as residents. However, cruise ship passengers fall outwith the Bill’s scope and will not be liable to pay a levy. Cosla officers and colleagues in councils have been working closely with the Scottish Government to develop a joint proposal for a cruise ship levy.”

Cosla called on MSPs to back an amendment for a cruise ship levy to be included in the Visitor Levy (Scotland) Bill to make it a “truly national proposal”. Both the Liberal Democrats and Green Party have made similar demands given the social and environmental impact of the sector.

Cruise ships were not included in the proposed legislation given a number of “practical barriers” and concerns surrounding such a passenger levy. Where one local authority chooses to apply a levy, cruise operators may choose to call instead at a local neighbouring authority to avoid paying the charge.

In Amsterdam, a €8 [£6.80] tax per passenger per day was applied to sea and river cruise vessels, with large cruise companies subsequently by-passing the port in favour of other destinations in the Netherlands with passengers then being bussed in to the city.

The tax was thought to contribute to a 40 per cent fall in port calls in 2019, a Scottish Government paper said.

Many ports in Scotland are predicting their strongest years yet. Greenock Ocean Terminal, following the launch of its new £20m visitor centre, said it was due to welcome 79 cruise liners, carrying up to 115,000 passengers throughout 2024, with early bookings for 2025 already heading towards a new record for the port.

The cruise port welcomed its first big vessel of the season on Friday, with the huge Regal Princess, capable of carrying 3,560 passengers, visiting the town. It was later spotted in the Firth of Forth.

Meanwhile, Forth Ports said more than 235,000 passengers were expected to visit Edinburgh, Fife and Dundee with 161 cruise visits booked –up from 149 in 2023.

The planned opening of Stornoway’s deep water port will allow 60,000 cruise passengers a year to visit – up from 20,000 at present.

Chris Greenwood, senior research fellow of the Moffat Centre for Travel and Tourism Business Development at Glasgow Caledonian University, said cruise tourism had an ability to “always ramp up more quickly than the infrastructure can keep up with”.

He said: “My worry is that the benefit you get from disgorging thousands of visitors into a small destination like Orkney on excurisions is that the money doesn’t go back into the communities as the excursions are bought on the cruise ships.”

Separate research found each cruise passenger that arrived in Orkney spent an average of £40. Mr Greenwood said: "Passengers are not encouraged to explore themselves. Partly that is to try and keep schedules, but it is also about the commercial relationships that are formed.”

He suggested cruise operators should work more closely with destinations to increase the benefits felt locally from docking cruise ships. Anecdotally, pipers were bussed in from across the country to play for visitors arriving at Greenock due to a contract with an agency, he added.

Robert Mason, chair of Cruise Scotland said: “The growing cruise industry makes a significant contribution to the country’s economy and our members would welcome being part of a formal consultation with Scottish Government to understand the detail of the proposed cruise visitor levy.”

A Scottish Government spokesperson said: “A visitor levy will be a force for good, giving councils the opportunity to reinvest the money they raise in facilities and services largely used by visitors. Enabling councils to charge a levy in their area if they wish would also be a significant step towards empowering local government and strengthening local democracy.

“The Scottish Government has been engaging with the tourism industry and other stakeholders on the proposed levy for a number of years and continues to work with them as part of an expert advisory group.

“A lead-in time provides the space for businesses to put in place systems and train staff so they can collect the levy and remit it to the local authority. This has been a key ask from the accommodation industry and was supported by 16 of the 18 local authorities that responded.

“The Scottish Government is open to giving local authorities the power to create a cruise ship levy. We are continuing to examine how best to take this forward working in partnership with Cosla and local government.”