John Donnelly: Tourist tax can secure capital’s future

For many visitors Edinburgh is the gateway to the rest of Scotland. Picture: Ian Rutherford
For many visitors Edinburgh is the gateway to the rest of Scotland. Picture: Ian Rutherford
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The question of a Transient Visitor Levy (TVL) or “tourist tax” for Scotland’s capital has been the subject of much debate in the recent weeks and months. While many opinions have weighed in on the pros and cons, the viewpoints of two critical parties – residents and visitors – have been missing to date.

A tourist tax is one potential way to successfully managing Edinburgh’s long-term appeal. It’s my view that we’ve got to consider it, amongst other solutions, although not without first adding data to the discussion.

That’s why Marketing Edinburgh commissioned an independent survey asking residents and visitors for their views on a tourist tax for Edinburgh, for the first time. It found that the majority of locals are supportive of the idea and visitors would not be put off coming to the capital.

Our research took place in July and August 2018 to assess views during the busy festival season and found that the introduction of a transient visitor levy would not discourage visitors. In fact, 92 per cent of tourists said that they would have visited Edinburgh even if a Tourist Levy of £1 per room, per night were in operation. And 78 per cent said they would still come, even if the tax was as high as £4 per room per night.

The majority of residents were in favour – 59 per cent said they were supportive of a transient visitor levy introduced in the city, and 55 per cent were aware of the City of Edinburgh Council’s proposals to introduce one. When asked about drawbacks, 45 per cent of residents were concerned about putting tourists off – a concern addressed by the overwhelming majority of visitors who would still come to Edinburgh even if a tax were in place.

Both visitors and residents preferred a flat rate charge levied on accommodation over a charge on other services such as taxis or restaurants – a format already in place in Amsterdam, Paris or Rome – cities which, alongside many others, already operate a tourist tax.

It’s something people are open to, and with reason. Looking to the benefits, a Tourist Levy could bring around £11 million to the city every single year.

Our growing tourism appeal is set against a need to support the council in managing the consequences of that success. More people coming to the city is brilliant news for our economy – but it puts increased pressure on our ability to service them. So, how can we secure sustainable investment to maintain our position as one of the world’s best destinations without compromising the city experience for those who live here? A tourist tax is a proven model.

Our research shows 54 per cent of visitors and 28 per cent of residents would like to see a levy spent on maintaining public areas, should it be introduced. This could include street cleaning, looking after parks, keeping our festival spaces vibrant and improving roads (which 28 per cent of residents said they would like a levy to be spent on). Residents demonstrated concerns about putting tourists off, but proceeds from a tourist tax could also contribute to strategic city marketing campaigns, supporting the city where and when it needs it most.

There’s an old – and incorrect – argument that Edinburgh sells itself. But, when it comes to destination management, there’s never been a more competitive time. All major international cities, and plenty of smaller ones too, are prioritising their promotion, recognising the positive financial impact visitors can have. Edinburgh is the jewel in Scotland’s crown and, for many, the gateway to the whole country – for the sake of our tourism industry, we cannot let it slip behind. Investment in Edinburgh’s visitor industry means the whole country benefits.

We now know residents and visitors are open to a TVL, but there’s another crucial party we must engage in discussion: Edinburgh’s businesses – particularly the tourism and hospitality industry. The City of Edinburgh Council is now taking this conversation forward, and with this recent research in hand, I believe we can now confidently debate the facts.

Built together, a tourist tax could give us more control over Edinburgh’s future; a solution that would champion the appeal of the city as an outstanding place to live, work, study, invest in – and visit. We must explore it as an option.

John Donnelly is Chief Executive of Marketing Edinburgh