Scotland 'priced out' as 20 councils line up tourist taxes

Warnings that Scotland is pricing itself out of the global tourism market have intensified after it emerged nearly two in three of Scotland's 32 councils are introducing or considering controversial tourist taxes. Businesses say visitors are already turning to cheaper destinations overseas as councils press ahead with new overnight levies that will pile extra costs onto holidays. Five councils have already approved the so-called tourist tax, with Edinburgh set to become the first to introduce one today, while Glasgow, Aberdeen, Stirling and West Dunbartonshire are due to follow. It has emerged a further seven councils are consulting on similar schemes and another at least six local authorities are considering whether to introduce their own levies. Another two have postponed any action till next year. The expansion of the charges comes as Scotland's biggest tourism body warned businesses are already losing customers because overseas visitors increasingly see Scotland as an expensive destination. The Scottish Tourism Alliance, which represents more than 250 tourism organisations and businesses, said a combination of visitor levies, high VAT, rising visa costs and the UK's Electronic Travel Authorisation (ETA) system was making Scotland less competitive against rival destinations abroad. In a briefing circulated to ministers the alliance warned that the rising cost of Scotland and the wider UK as a visitor destination is having a "significant impact" on international competitiveness, along with raised expectations of visitors assuming better quality and greater value for their money. It warned visitor levies present "a new threat to the tourism and hospitality sector’s price competitiveness and risks creating a tipping point that many visitors will be unwilling to pay, impacting further on the declining domestic market". Marc Crothall, chief executive of the alliance, said: "For many international tour operators, Scotland is increasingly being viewed as one of the more expensive destinations to package and sell in Europe. While many businesses are currently reporting relatively static booking levels, other competing destinations continue to grow. Our concern is not simply about today's bookings, but about Scotland's future competitiveness. "When you combine higher operating costs, VAT, visa and ETA charges, the introduction of visitor levies and uncertainty around future flight prices, there is a genuine risk that Scotland becomes progressively harder to sell in an increasingly competitive international market. "That is is why we believe every proposed visitor levy should be accompanied by a robust assessment of its impact on competitiveness before further schemes are introduced." The warning comes little more than two years after Holyrood passed the Visitor Levy (Scotland) Act, giving councils the power to charge visitors staying overnight in hotels, guest houses, B&Bs, self-catering accommodation and other paid accommodation. The legislation does not force councils to introduce a levy but allows each authority to decide whether one should be imposed locally after carrying out consultation with businesses, residents and tourism organisations. Edinburgh became the first council to approve a levy and is to charge visitors 5% of the cost of overnight accommodation from today. Glasgow has also backed a 5% levy, while Aberdeen approved a 7% charge, Stirling has agreed a 3% levy and West Dunbartonshire has also approved a 5% scheme. Argyll and Bute, East Lothian, South Lanarkshire, Dundee, Moray, Comhairle nan Eilean Siar and Perth and Kinross are consulting on introducing similar charges, while councils including Aberdeenshire, Falkirk, Fife, North Lanarkshire Council, North Ayrshire Council and West Lothian are considering whether to follow suit, according to a combination of Visit Scotland records and Herald inquiries. South Ayrshire Council said it would not look at it until August 2027 at the earliest. East Ayrshire Council agreed to pause any further work on development of a levy until August 2027. Supporters of the charges argue the money will be invested back into tourism by helping councils improve facilities and services used by visitors, such as public toilets, parks, litter collection, signage, events, transport links and attractions. However, tourism businesses fear that layering another charge on top of accommodation costs could persuade visitors to holiday elsewhere, particularly at a time when families are already facing higher living costs and international travellers have a growing choice of destinations. The STA said in a briefing circulated to some MPs that Britain's competitiveness had already been weakened by the overall cost of visiting the country. It pointed to the World Economic Forum's Travel & Tourism Development Index for 2024, which ranks the UK 113th out of 119 countries for price competitiveness, saying factors such as VAT and other charges were making Britain a comparatively expensive place to visit. The organisation also highlighted increases in visa fees and the introduction of the Electronic Travel Authorisation (ETA), which overseas visitors from many countries must now obtain before travelling to the UK. According to the briefing the cost of a two-year UK visitor visa has increased by 40% over four years, while the ETA costs £20 for two years. The alliance said comparable European arrangements are cheaper and cover longer periods. It warned that visitor levies would add another financial hurdle. The alliance said: "The STA remains concerned that the introduction of the power to introduce a visitor levy will add an even greater cost burden on visitors. With VAT charged on the levy, this will effectively be a double tax and further drive up costs for consumers." The organisation said the issue was not simply the amount visitors might pay in one location but the cumulative impact if several destinations all introduced their own levies. It says that Scotland's geography means many overseas visitors travel through several parts of the country during one holiday, often combining cities with rural areas and the Highlands. Visitors to annual events like the Royal Edinburgh Military Tattoo will have to pay the city's new tourist tax from this summer. The alliance warned that introducing charges in multiple destinations could make holidays both more expensive and baffling for visitors planning trips around Scotland and the wider UK. They said: "The UK’s unique geography makes it possible to stay across multiple locations during a visit – with tourists regularly travelling from London to Edinburgh to the Highlands during their stay. Introducing multiple visitor levy charges across the UK risks making these kinds of stays more expensive and confusing for visitors in the future. The STA said councils should not be able to introduce a levy without first carrying out a detailed independent assessment of the likely economic impact on local businesses and tourism. It said: "The STA encourages the UK Government to legislate that a detailed, independent economic impact and competitiveness assessment be required before deciding to introduce a local visitor levy scheme in any given area, with statutory guidance setting out detailed criteria for the impact assessment." The analysis which has gone to the UK Parliament's Culture, Media and Sport Committee said many British families had increasingly opted for lower-cost all-inclusive holidays abroad instead of breaks in Scotland. The organisation renewed calls for the UK Government to reduce VAT on tourism and hospitality, review the cost of visitor visas and ETAs and bring back tax-free shopping for overseas visitors, saying those measures would make Scotland more competitive internationally. The STA urged both the UK and Scottish governments to work more closely together to strengthen one of Scotland's biggest industries. It says the sector acts as Scotland's "shop window to the world", supporting jobs, businesses and communities across the country, but warns that unless action is taken to improve competitiveness there is a growing risk that visitors will increasingly choose cheaper destinations instead.