Edinburgh is one step closer to becoming the first city in the UK to introduce a tourist tax after the move was approved by councillors last week.
Plans for the tax, or ‘Transient Visitor Levy’ (TVL), include a £2 per night room charge, an exemption for campsites, a cap of seven consecutive nights and investing an estimated £14.6 million every year.
Councillors backed the plans by 43 votes to 15 last week, and the local authority will now put its recommendations to Scottish parliament.
The move would see the city follow in the footsteps of cities such as Paris, Venice and Barcelona, while Bath and Oxford councils have also called for similar powers.
Council leader Adam McVey said: “My expectation is that this will be a locally-run, collected and set tax. It will be additional to other revenues. My mind is absolutely clear – this is additional to our resources in this city.”
The £2 charge is regarded as a better approach than a percentage charge, while the seven-night cap is designed to protect seasonal and festival workers in the city for extended periods of time.
A recent public consultation indicated more than half (51pc) of accommodation providers and 91pc of residents supported the introduction of a TVL.
The council estimates the proposals could raise between £11.6 million and £14.6 million per year.
It’s putting the cart before the horse
Councillor Iain Whyte
Opposition to the TVL in Edinburgh has come from the organisations such as UK Hospitality (UKH), claiming it would be bad for price-competitiveness.
UKH previously estimated the annual negative economic impact from the imposition of a TVL at £2 per room, per night, will be £175 million to £200 million in Scotland – £44million to £94 million in Edinburgh.
The Conservative group sought to amend the motion, raising concerns over how the money might impact block grants and the fact the levy is set at a flat rate.
Tory members also wanted assurances any extra funds would not impact how they are allocated resources in future.
Councillor Iain Whyte said: “For me, the most important bit is whether this will be additional money. We have got to sort that out. This is a muddled policy, it’s putting the cart before the horse.”
The Scottish budget was approved on January 31 which set out that ministers will legislate to allow local authorities to introduce a tourist tax on hotel stays.
John Donnelly, chief executive at Marketing Edinburgh, said: “Whether you support or oppose TVL, the facts are irrefutable – we have a growing need to protect areas of economic value yet a dwindling pot of money to do so.
“Solving the problem means we can continue to invest in world-class festivals, protect our built environment and support the promotion of the city, all of which are crucial to building a bright future for Edinburgh.”
Willie Macleod, UKH executive director for Scotland, said: “We are extremely disappointed today that the City of Edinburgh Council has voted in favour of a tourist tax.
“During the debate, Cllr McVey stated that consultation was a critical part of their process.
“Our members in the city would disagree, they do not support the introduction of a tourist tax and their opinions have been ignored.”
Mr McVey said after the vote: “A TVL is the right choice for a historic, world-famous festival city like Edinburgh and our proposals have cross-council and citywide support.
“Edinburgh warmly welcomes over 4.5 million visitors annually which brings huge benefits but, the reality is, this footfall also has an impact on our streets and on our services.”
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