New analysis published by Dundee City Council has revealed that a fixed amount Visitor Levy could generate significantly more revenue than a percentage-based model, challenging one of the key assumptions that has underpinned much of the debate around Scotland’s Visitor Levy legislation.
As part of its emerging Visitor Levy proposals, Dundee City Council has modelled two potential approaches:
The results are striking.
According to the Council’s own financial modelling, the £5 fixed amount option would generate approximately £25.23 million in net revenue over ten years, compared with £22.34 million under the 5% percentage model. That represents almost £3 million more revenue available for investment in visitor-related facilities and services.
The modelling also shows that the fixed amount option would generate around 11-12% more revenue each year than the percentage-based approach.
For many years, the tourism industry has argued that fixed amount visitor levies can offer a simpler, more transparent and easier-to-administer system for businesses, visitors and local authorities alike. One of the principal criticisms often levelled at fixed charges was that they would generate less revenue than percentage-based levies.
Dundee’s analysis suggests that this is not necessarily the case.
The Council’s report highlights that a fixed amount charge can provide predictability and simplicity while also generating strong revenue returns. Indeed, Dundee’s modelling indicates that the fixed amount approach delivers both higher net revenues and a stronger benefit-cost ratio than the percentage alternative.
Commenting on the findings, Fiona Campbell, Chief Executive of the Association of Scotland’s Self-Caterers (ASSC), said:
“Throughout the development of Scotland’s Visitor Levy legislation, there has often been an assumption that percentage-based levies would automatically generate more revenue than a fixed amount model. Dundee’s own modelling demonstrates that this is not necessarily true.
“What this analysis shows is that local authorities should approach levy design with an open mind and base decisions on local evidence rather than assumptions. Simplicity and transparency do not have to come at the expense of revenue generation.
“The introduction of the Visitor Levy (Amendment) (Scotland) Act 2026 gives councils greater flexibility to choose the model that works best for their local circumstances. Dundee’s work provides an important evidence base for that discussion.”
The ASSC has consistently opposed the introduction of a Visitor Levy, warning of the cumulative impact of increasing costs and regulatory burdens on Scotland’s tourism accommodation sector. However, where local authorities choose to proceed, the Association has argued that any levy should be as simple, proportionate and administratively efficient as possible.
If agreed by Councillors, Dundee’s proposals will now move to statutory consultation before any final decision is taken on whether a Visitor Levy should be introduced.
The findings are likely to be closely scrutinised by councils across Scotland as they consider their own levy schemes under the amended legislation.