'We're under the cosh enough' – Inverness hotel boss says tourist tax is a disaster
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An Inverness boss fears the introduction of a tourist tax – also known as a visitor levy – could be the straw that breaks the camal's back.
Tony Story, who runs the Kingsmills Hotel and Ness Walk, says the hospitality industry is facing enough challenges already.
He has previously spoken about rising costs for the business, but is now concerned that extra costs for visitors may see them go elsewhere instead.
It comes after Highland Council leader Raymond Bremner said the local authority will now be able to "plan for the introduction of this local levy" after the Scottish Government today signalled its intention to introduce such a Bill to Holyrood.
If passed, the levy can be applied by councils based on a percentage of overnight stay costs.
Mr Story said: "It's a disaster. We're under the cosh enough as it is.
"I know it's not something that will happen in the next 10 minutes but it's important people understand this puts more pressure on everything.
"The fact it looks likely to be a percentage, rather a than a fixed quantity doesn't help either. People were saying before, it's just £1, why not make it £2? At the end of the day, it will be a disincentive.
"People choose to come here, then they make choices while they are here. It may be the difference between coming here, then eating in a restaurant or going to a take-away.
"But overall it feels like we're in a pretty anti-business environment, especially with the likes of the Deposit Return Scheme (DRS) – and we see what's happening there – and the potential ban on alcohol advertising. This is all while we have VAT among the highest in Europe.
"The only blessing is that it's set to be ringfenced to go back into tourism-related projects."
He believed the Scottish Tourist Alliance did its best to ensure any money generated goes towards local infrastructure, such as public toilets.
But he stressed: "People are all facing choices. They have mortgages to pay, so are they going to have that extra weekend away? It's tough and it's going to give at some point. This might be the straw that breaks the camal's back."
Asked if anything could be done to stop it, he added: "We can maybe take heart from the DRS. A lot of lobbying got that halted."
'Highland Council has long supported the idea of a tourist levy'
Back in December 2019, the council approved the findings of a public consultation supporting the introduction of a tourist visitor levy (or TVL) and committed to further work to develop the best scheme for the Highlands.
Cllr Bremner said: “The Highland Council has long supported the idea of a tourist levy to enable the local authority to invest in local infrastructure and it is a commitment in our council programme.
"The introduction of the Bill is good news and means we can now plan for the introduction of this local levy following approval of the Bill by parliament.”
Residents living in tourist hotspot areas have long complained about the negative impacts of high volumes of visitors – in the form of littering, road congestion, damage to road surfaces, increases in the number of holiday lets driving local residents out of the housing market.
Some business leaders, meanwhile, have urged caution, citing their own fears that levies could drive tourists away and harm the local economy.
'Tourism accounts for a large proportion of the Highlands and Islands economy'
Inverness-based economist Tony Mackay said: "I am opposed to a tourist visitor levy (TVL) because I believe it will discourage some tourists from visiting the Highlands and Islands. A tourism levy/tax sends a bad signal to potential visitors.
"I understand the concerns about the problems with roads damage etc.
"Tourism accounts for a large proportion of the Highlands and Islands economy and their spending is of great benefit to local businesses, although not directly to Highland Council. It will be more important than usual in 2023 and 2024 because of the other problems in the national economy.
"I think that the roads problems etc would be better resolved by the Scottish Government providing a larger share of its annual revenue to the local authorities including Highland Council."
Under the plans, councils would be required to consult communities, businesses and tourism organisations before putting a visitor levy in place. They would also have to consult on how any revenue raised should be spent.
It is expected that it may be 2026 before the new tax is implemented.
'I don't think it will put tourists off at all'
The chairman of the council's economy and infrastructure committee Ken Gowans said the tourist levy was a fair way to balance the demands on the public purse from those who use facilities and roads while denying that it would put people off coming to the Highlands.
“For me the key thing in this is fairness," he said "The people that are using the services are helping to pay for them because for now the burden is solely on the Highland Council taxpayers.
“Taxpayers in the Highlands are the ones who are paying for upkeep on infrastructure for roads, for toilets, for tourist facilities but the tourist tax means that we can not only maintain but improve and add value to the tourist experience.
“In terms of whether it will put tourists off, I don’t think it will put tourists off at all, it is already widely used across Europe and North America where it is just standard and it is a tiny amount.
“I just looked up hotels in the Inverness area for a friend – £400 one was charging for a night and the others are routinely charging £200 to £300 for a night and a small fraction of that, though a figure has not been decided yet.
“But should it be employed and if it was employed at something like two per cent then it is a tiny amount.
“If you look at the cost of food and accommodation like we had the Kylesku Hotel charging £70 for two glasses of wine and two fish and chips – when you get to that level you have to say it is a small amount that will be a huge help to the Highlands.
“So for me it is about fairness, it is about asking the people who are using the services to pay a little to help to maintain them.”
What's the national take on it?
Scotland's public finance minister Tom Arthur said: “Scotland is already a very popular tourist destination and the domestic and international visitors we welcome every year have a significant and positive impact on the Scottish economy. Giving councils the power to introduce a visitor levy is one tool that will provide additional resources to continue to attract visitors to Scotland.
“Levies on visitors staying in paid-for accommodation are already used around the world and it is reasonable for local areas to want a small contribution from tourists to help support and sustain visitor economies."
COSLA – the national association of Scottish councils – welcomed the Scottish Government’s move to give councils the power to apply a visitor levy.
Its resources spokesperson Councillor Katie Hagmann said: “COSLA has consistently called for the ability of councils to set and raise taxes based on what is needed and decided locally. By providing each local authority with the power to set a rate charged to visitors, and to do so independently of the Scottish Government, the local visitor levy empowers local decision-making, with councils able to respond to the needs of their area and the people who live there."
