Edinburgh’s tourist tax could raise nearly €60m a year for city improvements

Edinburgh is set to become the first city in Scotland to introduce a tourist tax after the Scottish government gave local authorities powers to introduce visitor fees.

Edinburgh City Council has approved a proposal called the Transient Visitors Levy, which will be introduced in 2026.

The levy is expected to raise up to £50 million (€59 million) a year, which will be used to make improvements to the city.

However, some tour operators are concerned that this could put off travelers from the destination.

Authorities in the Scottish Highlands are also considering introducing a tourist tax.

Edinburgh to become first city in Scotland to charge tourist tax

Earlier this month, Edinburgh authorities approved a proposal to charge guests in hotels, inns, hostels and vacation rentals, including Airbnbs, five percent of the cost per room per night.

The fee will be capped at seven consecutive days and is scheduled to come into effect in 2026.

It comes three months after the Scottish Parliament passed a bill allowing local authorities to introduce visitation taxes.

For 12 weeks, starting in September, there will be a period of public consultation on the rate during which residents will be asked whether the five percent rate should be higher or lower.

The city council says the funds will be invested in infrastructure, affordable housing, destination management and culture, heritage and events.

The tax is expected to raise up to £50 million (€59 million) a year for the Scottish capital by 2029.

Council leader Cammy Day said 35 percent of profits would go to the arts sector.

Tour operators concerned about introduction of Edinburgh tourist tax

The tax will bring Edinburgh into line with other popular tourist destinations in Europe, including Amsterdamwhich has a tourism rate of 12.5%, and Berlin.

However, some tour operators fear that the fee will make Edinburgh a less competitive holiday destination and drive away visitors.

“It remains a very controversial issue,” Marc Crothall, chief executive of the Scottish Tourism Alliance, told travel news website Skift.

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“There are concerns around the future total price to the customer and what impact this may have on future bookings, particularly from our domestic visitors, when there are already signs of a decline in bookings from this market due to the ongoing UK cost of living crisis.”

But Day doesn’t think the tax will put off visitors. “I can’t imagine a few pounds putting anyone off visiting the city,” he told BBC Radio Scotland. “If you can spend hundreds of pounds on a hotel room, you might as well pay a few pounds to support the city you’re visiting.”

Scottish Highlands mull tourist tax

THE Highlands The council is also considering implementing a tourist tax under new powers introduced by the Scottish Government.

The region of mountains and valleys receives more than six million tourists a year, including day trippers and cruise passengers.

Officials say they will begin a three-month consultation period later in the year when residents will be able to give their views on the tax.

Like the Edinburgh tax, it would be a percentage of the cost of accommodation per night.

THE Highland Region was already considering a visitor levy in 2019 and calculated it would raise up to £10 million (€12 million) a year to improve local infrastructure.