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Tourism bodies request closure of City of Edinburgh’s Transient Visitor Levy (TVL) consultation on basis that it is ‘not fit for purpose’

Created: November 9, 2018
Posted in: Member Benefits, Representation, Tourism Industry

The representative body for Scotland’s tourism industry, the Scottish Tourism Alliance (STA) and hospitality trade body, UK Hospitality have called for the City of Edinburgh Council’s consultation into a Transient Visitor Levy to be closed at the earliest opportunity.

 In a letter sent to Council Leader, Adam McVey and Chief Executive, Andrew Kerr on 8th November, the organisations expressed their significant concerns about the biased nature of the consultation on the City for Edinburgh Council proposal for a Transient Visitor Levy/Tourist Tax (TVL) within the city.

The tourism bodies argue that the consultation document as it currently stands presents no opportunity for opponents of a TVL to register their opposition, fundamentally undermining the consultation, which currently has little or no support from within the City’s broader tourism industry.

The letter also raises the point that the consultation neglects to seek alternative views about how revenue could otherwise be raised and that the consultation fails to inform respondents of the contributions of millions of pounds by the tourism and hospitality sectors to the council finances through business rates and employment.

The organisations state that no effort has been made by Edinburgh Council to explain the impact of the UK VAT regime to respondents, which drives UK hotel day rates to a significantly higher level than Scotland’s international comparators, and that the consultation wrongly seeks views on whether TVL money should be spent on what many would argue are core Council services, such as emptying bins.

A request has been made by the organisations that the consultation ceases as soon as possible, particularly in light of the Scottish Government’s own proposals to consult with local authorities and industry as to whether a TVL approach should be considered at all.

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1.  The Scottish Tourism Alliance (STA) was formed in 2012, an evolution of the Scottish Tourism Forum which was established in 1998 to act as the Industry Leadership Group for tourism and the leading voice for the tourism sector in Scotland.

2.  UKHospitality is the leading hospitality trade association UK and represents the interests of the UK’s hospitality sector.

3.  The organisations are opposed to a TVL on the basis that while a tourism tax/visitor levy may work well for tourism businesses, destinations and local authorities in other global destinations where the level of VAT on tourism services is lower than that of the UK, the idea must be examined within the context of: the UK having the second highest VAT rate in Europe at 20%; the challenges which exist to the imposition of an additional tax; the impact on price-sensitive visitors and impact on businesses already coping with the ‘perfect storm’ of rising costs that tourism businesses in Scotland currently face.

4.  The organisations also argue that a tourism tax has the potential to negatively impact businesses, beyond the accommodation sector that would be expected to collect any tourist tax, that rely on the tourism economy by reducing visitor spending right across the industry; in pubs, restaurants, shops, cafes, visitor attractions and entertainment venues.

5.  The UK is second from bottom in the World Economic Forum ranking, 135/136, when measured solely on international tourism price-competitiveness; this is in stark contrast to its overall ranking of 5th in the world when the full range of international tourism indicators are included. This underlines that the introduction of a tourism tax or any such visitor levy would further reduce the competitiveness of our already heavily taxed sector relative to competitor destinations.

6.  Whilst the exchange rates are currently favourable for our international markets this may not persist beyond the short-term and the fact remains that around 60% of Scotland’s tourism spend comes from our already squeezed domestic visitors. Any further tax or levy applied could seriously dilute this market.

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