Is a Highland tourist tax a good thing or a blow to hospitality?
A Highland hotel proprietor says that the upcoming Visitor Levy is going to be another blow to the hospitality industry.
Tony Story who owns the Kingsmills Hotel and Ness Walk Hotel understands the levy - also dubbed the ‘tourist tax’ - is a way for the local authority to make money for infrastructure.
However, he believes that it needs to be implemented correctly, otherwise it will have a negative impact on the tourism industry.
In May this year, members of the Scottish Parliament passed the legislation which gives local authorities in Scotland the ability to introduce a levy on visitors staying in overnight accommodation.
The levy must be based on a percentage of the cost of an overnight stay in some types of accommodation, with the rate set by the local authority.
Accommodation providers will be responsible for collecting the levy from overnight visitors.
He said: “I can see the benefits of it, as it will support tourism infrastructure.
“But at the same time, the hospitality industry has already been suffering from high VAT, which is at 20 per cent and inflationary costs.
“During Covid we had support, but now it seems we are having to pay for that.”
He says that occupancy rates have been down this year among hotels in the region, with 10,000 to 12,000 less visitors this August comparted to last year.
He continued: “If the levy was £1 per room, I could understand and it would be standard for that.
“But at the moment there is no maximum on what the levy percentage will be, which is unwise.
“If it’s added onto the room charge it will become a revenue for the business, so then travel agents will take commission from it.”
At present, Edinburgh is suggesting a 5 per cent levy, however, Highland Council is yet to roll out its consultation on the matter.
Mr Story said that there has been an exaggeration of the cost of hotel rooms in the Highlands.
He said: “Many people think it costs hundreds of pounds for a bedroom but there is probably just one or two sold at that.
“The average spend is £100 per night.
“With high energy rates and inflation rates, the business is less profitable than it was pre-Covid.”
The local authority will have to consult on the outline of the levy scheme with local communities, businesses, and tourist organisations before introducing a levy.
Should the Council agree to go ahead — which looks likely — an 18-month implementation period will then begin before the levy scheme becomes operational.
Money raised by the levy must be used to develop, support or sustain facilities and services used by predominately by business and leisure visitors.
Local economist Tony Mackay believes the tourist tax is a good idea — but only if the funds produced go to the right areas.
He said: “I think a Highlands tourist tax is a good idea, as long as the money received is well spent.
“The Highland Council has the biggest financial deficit of all the 32 local authorities in Scotland and desperately needs more money.
“The Highlands economy has had a few poor years recently, with very little growth.
“However, the tourism industry has probably been the best performing, particularly with overseas visitors.
“I understand why local hotels are concerned about the possible negative impacts of a tourist tax but I believe that if the money is spent on improving facilities for visitors then it will be of positive economic impact to the economy overall.
“I think that Scottish and UK tourists will be deterred and not visit the Highlands as much as they would otherwise but I do not think a tourist tax will have a negative impact on overseas visitors.”
A Highland Council spokesperson said: “The Highland Council is expecting to launch its 3-month consultation during the last quarter of 2024. This will be widely promoted, and we will be encouraging anyone who has an interest to submit their comments via an online portal.”
