Voluntary marketing tax plan to boost city tourism

City leaders today admitted they were ditching attempts to introduce a compulsory hotel bed tax as it was unworkable and had virtually no support from government ministers or businesses.

Instead, they are looking at a new scheme aimed at raising millions of pounds from firms across Edinburgh which as well as hotels would see restaurants, cafes and shops all pay a percentage of their rates for advertising campaigns and other measures to boost business.

However, critics have cast doubt on the prospect of traders voluntarily paying into marketing schemes.

City leader Andrew Burns said the scheme already had “very positive feedback” from hotels and interest from other firms in paying into a communal fund from which the whole industry would benefit.

Malcolm Duck, chairman of Edinburgh Restaurateurs Association, said traders would have to be convinced there were clear benefits for their business.

He said: “I’m not sure there would be an appetite and  business owners will be very cautious about where control of the fund would lie.

“We’re already taxed out of existence. The danger is this is another tax, like another tram or congestion charge.”

Detailed proposals are still to be worked out but Essential Edinburgh, which runs the city centre business improvement district, raises £900,000-£1.2 million from around 600 traders and firms.

The bed tax – which government ministers refused to back – would have raised £3.2m by previous estimates.

Colin Paton, chairman of the Edinburgh Hotels Association, said the detail would be crucial but the current marketing budget for Edinburgh was a fraction of that in  Glasgow and Manchester and that a drop in summer takings per room – down 19 per cent on last year – was linked to lack of investment.

He said: “Tourism in Edinburgh is everybody’s business. It’s about the butcher, baker, candlestick maker, and not just hotels.

“If this is to work it must touch the broadest cross section of business in Edinburgh because we all benefit from it.”

Cameron Rose, a Conservative councillor, said: “It’s less controversial than the bed tax, although the fact that it’s voluntary creates potential difficulties. However, it is worth investigation.”