Implementing a visitor levy, or tourist tax, in Scotland appears to be a simple way to raise money for local infrastructure and tourism. However, the reality for areas like Argyll and Bute is far more complex and deeply concerning.
What’s a tourist tax?
In principle, a tourist tax sounds like a good idea, and in fairness it’s something many would support. A tourist tax is a small fee that may be charged at borders, included in flight tickets, or added to entry costs at attractions. In all cases, it is aimed at tourism.
I would support it if the tourist tax were similar to the EU, ideally a flat rate of about £1 per person per night. I also believe the VAT on accommodation and hospitality in the UK should be aligned with the EU rate of 6-10% to enhance affordability. However, the proposed visitor levy is not a tourist tax and the legislation specifically rules out flat rates.
What is the visitor levy?
The proposed levy would see everyone paying an additional 5% per person, per night on their accommodation costs. It’s not just tourists, so it cannot be, by definition, a tourist tax.
Anyone from the UK, Scotland, or even within the same county staying overnight in accommodation must pay the visitor levy. People from the islands seeking medical treatment on the mainland will need to pay too.
Even the disabled must pay with their dignity because they have to go through a bureaucratic process proving their eligibility to obtain a refund from the council after their stay.
While a public consultation is underway – until 10 April 2025 – there is a feeling that the City of Edinburgh’s visitor levy is not only going to be used as a template, but as a straightforward copy and paste. A rural area seeking tourism differs greatly from a major city attracting 4.98 million visitors annually and ranked highly in global tourism.
A one-size-fits-all approach
One of the main criticisms we have of the levy is its percentage-based rate. Argyll and Bute’s proposed 5% levy is too high for rural communities, especially compared to Wales, where the rates are £1.25 per adult and 75p per child per night. Similarly, Manchester’s levy is a flat £1 per person, per night, highlighting the stark contrast in approaches. This uniform model doesn’t consider the unique challenges in places like Argyll and Bute and other rural areas, where even minor deterrents can significantly impact the local economy.
In the example chart, we show a modest £200 per night room for two for five nights is £50 in visitor levy, compared with flat rates of only £10. The competitive disadvantage is strikingly evident. If they were cost-conscious visitors, they might well visit elsewhere and who would blame them. Let’s not forget that as a percentage, this scales up. Discretionary funds are limited, so we can’t assume people will pay the visitor levy and spend normally in the local economy. People make choices and they may choose to withhold the £40 from the local economy. After all, people aren’t made of money.
Why does this matter?
Although at first, 5% may appear to be a small cost for what the council calls visitors, the bigger picture reveals how it could seriously harm rural economies that are already struggling to compete with popular tourist destinations. In places like Campbeltown and Kintyre, where tourism is weaker than in the islands and Highlands, this extra cost might deter visitors from staying overnight.
In rural areas, it’s not just tourists who will feel the pinch. Workers, locums, nurses, and visiting relatives who already bear the brunt of limited accommodation options will also face higher costs.
This levy creates yet another barrier to attracting the workforce and investment these communities desperately need. The levy will also reduce spending in local shops, cafés and restaurants. In places where every penny matters, that’s a big loss.
Overlooking key issues
The Scottish Government’s Visitor Levy (Scotland) Act 2024 and Visit Scotland’s rules offer little opportunity to discuss details, like the exclusion of motorhomes, campervans, wild camping and cruise liners from the levy. While these groups massively impact local infrastructure, their exemption feels like a missed opportunity for fairness.
How can we push back?
The public consultation process is underway, and now is the time to act. While arguing specifics of the legislation may prove ineffective, we can state our case during the consultation process. It’s vital that our voices – as business owners, workers, and residents – are heard.
The Argyll and Bute Business Alliance has launched a campaign site to dispel myths about the visitor levy and gather support for fairer solutions. Visit the site to learn more and help protect Argyll and Bute from harmful legislation.
I’m discussing this in more detail on my podcast, Richardson’s Rubicon, where I explore its implications for rural Scotland and beyond.
The bottom line
Although the visitor levy aims to help, it may hurt fragile rural economies more than it helps. We must all engage with the consultation process and promote fair solutions to ensure tourism benefits our communities instead of harming them. Join the conversation, make your voice heard, and let’s work together to find a better path forward. Visit the campaign site today to learn how you can help.
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