Growth in the tourism industry is one of the few bright spots on the UK’s gloomy economic radar. But not everyone is happy amid the post-Covid boom.
There is mounting frustration at “overtourism” at scenic hotspots and popular cities, where residents have complained about noise, litter and Airbnb-type rentals pushing out housing for local people.
As a result some councils are now imposing “tourist taxes” on overnight stays in the hope the extra revenue can be reinvested in better facilities and infrastructure.
Edinburgh Council decided last month to bring in a 5 per cent visitor levy on overnight stays – the biggest introduced in the UK to date.
The charge – per person, per night, for the first five nights – is aimed at bringing in £50m a year for improved lighting, pedestrianisation schemes and other improvements.
However, tourism chiefs have told The i Paper they fear cash-strapped councils will use the tax to fill “black holes” in their budgets rather than improving the local environment.
Trips from overseas hit a record high of 41.2 million in 2024, according to figures released this week by VisitBritain – 9 per cent up on the previous year. A further 5 per cent rise is expected in 2025.
With trips to the UK from overseas hitting a record high of 41.2 million last year, millions of tourists, both international and domestic, could soon be asked to stump up more cash when on holiday.
Edinburgh’s new charge comes after the SNP-led Scottish Government passed legislation allowing visitor levies to help councils capture and reinvest money from growth in tourism.
Two-thirds of local authorities in Scotland are thought to be considering their own levy. Glasgow, Aberdeen, Stirling, Falkirk, Highland and Argyll and Bute councils are already consulting their residents on a tourist tax.
The Welsh Government is following suit. The Labour administration has introduced a bill allowing councils to charge £1.25 a night, per person, for hotel and self-catering accommodation and 75p a night for hostels and campsites.
There is a similar push under way in England. Manchester has already introduced in a £1 a night voluntary charge, per room, for visitors using the city’s hotels.
The scheme launched in 2023 is run by the Accommodation Business Improvement District (ABID) group of big hotels, rather than the council, to fund street enhancements and marketing campaigns.
Liverpool’s ABID group is planning to do the same, with a £2 nightly fee per room expected to begin this summer.
London Mayor Sadiq Khan said at the end of last year that he was “happy to look into” the possibility of a similar tourist tax in the capital – although nothing formal has been proposed.
In Bristol, the Liberal Democrat group has put forward a visitor levy. The local party, though not in power, said a £2-per-night accommodation charge could be an “innovative revenue stream”.
Tourist bodies such as the Scottish Tourism Alliance and the Welsh Tourism Alliance are firmly opposed to visitor levies. B&Bs and self-caterers using Airbnb and other platforms fear an extra tax will force them to push up prices and turn tourists away.
Ralph Averbuch, who runs three self-catering flats in Edinburgh with his partner, said the 5 per cent levy coming into force in July 2026 will make life “hugely difficult”.
He added: “Some will try to absorb the cost themselves. But I’m sure it will have an impact in putting up prices. We’re heavily reliant on tourism in Scotland. Why are we trying to put people off?”
Russell Fraser, managing director of Loch Ness Hub and Travel, said the 5 per cent levy proposed by Highland Council would push some accommodation providers out of business. Visitors may “vote with their feet” and stay away, he fears.
Fraser would prefer a flat-rate charge, like Manchester’s £1-a-night scheme, arguing that the percentage model being considered across Scotland under the SNP legislation is “unnecessarily complex” to administer.
“It will be expensive and time consuming to work out each amount, work out VAT, share your bookings, share your revenue [with the council],” said the Loch Ness tourist chief. “It’s ends up being a further tax on business.”
Rowland Rees-Evans, chair of the Wales Tourism Alliance, is not happy with the £1.25-a-night flat-rate charged planned for councils under the Welsh Labour bill, describing it as a “massive worry” for small accommodation providers.
“It may not sound like a lot – but if you add on the VAT it takes it to £1.50 a night. If it’s a group of six, staying seven nights, it’s £63. People may decide to go down to Somerset instead.”
Rees-Evans added: “Councils have had so many cuts that they will think, ‘Let’s use it to fill [budget] black holes’. Which goes against the idea that it will help communities deal with tourism.”
But advocates of tourist taxes believe council bosses should be entitled to capture some of the growth in the industry and redistribute it however they wish.
The Centre for Cities think-tank wants the UK Government to look at legislation to help English councils bring in their own local levies.
“Cities have seen growth [from tourism] and haven’t been able to capture the benefits,” said policy director Paul Sweeney. “We think it’s probably a good thing for councils to spend it as they see fit.”
“I think the risk [of turning tourists away] is really small. I’ve never seen any evidence that levies in European cities turn people away.”
Living Rent, a tenants’ union in Scotland, wants Edinburgh and other council bosses to ring-fence tourist tax revenue for much-needed affordable housing.
Chair Aditi Jehangir said the money must be spent on “improving the lives of the people who live and work in our cities”, adding: “This has to mean using money raised for council and social housing.”
Edinburgh Council has promised £5m of the £50m expected to be raised each year will go to housing and “tourism mitigation”.
The Scottish Government has not been prescriptive on how tourist taxes should be used. A spokesperson said levies could be adopted to “enhance facilities and services substantially”.
A Welsh Government spokesperson say visitor levies would help protect the “long-term sustainability” of the tourist industry by allowing money to be “reinvested in the local area”.
Comments
Leave a Comment