Edinburgh is set to become the first city in Scotland to implement a tourist tax on hotel stays, with the approval of a proposal to charge guests 5% per room night, capped at seven consecutive days, starting in 2026. This decision comes after the Scottish parliament passed a bill enabling local city councils to charge tourist taxes. The funds collected from this tax will be used to support affordable housing, infrastructure, destination management, culture, heritage, and events, with an expected revenue of £45 to £50 million per year by 2028/2029. Other local authorities in Scotland are now considering following suit and implementing their own tourist taxes.
The local tourism industry in Edinburgh has expressed concerns about the impact of the new tax on the destination’s competitiveness. There are worries that the increased cost for visitors may deter tourists from choosing Edinburgh as a destination, particularly considering the already high UK value-added tax rate of 20% on hotel rooms, one of the highest in Europe. Some industry professionals feel that a 5% tax on room nights may prove challenging, as many European cities typically charge a flat nightly fee instead. Amsterdam, for example, introduced a 7% tourist tax on overnight stays at accommodations this year.
Despite concerns about the potential negative impact on tourism, city officials are hopeful that the revenue generated from the tourist tax will benefit the local community and enhance the overall visitor experience. The tax is intended to support various initiatives, including affordable housing, infrastructure improvements, and cultural events. It is seen as a way to ensure that the tourism industry in Edinburgh continues to thrive and contribute to the local economy. There are calls for any surplus tax collection to be reinvested into enhancing the visitor experience and supporting the tourism industry, rather than filling city council budget shortfalls.
The approval of the tourist tax proposal in Edinburgh marks a significant moment for Scotland’s tourism industry, as it sets a precedent for other local authorities in the country to consider implementing similar taxes. The move reflects a growing trend in European cities to levy charges on tourists to help manage the impact of tourism on local communities and infrastructure. While the implementation of the tax may face challenges and resistance from some businesses and visitors, it is ultimately seen as a necessary step to address the growing demand for tourist services and ensure sustainable tourism development in the region.
In the coming months, Edinburgh’s city council will engage in a public consultation phase to gather feedback and input from stakeholders and the wider community about the proposed tourist tax. This process will provide an opportunity for residents, businesses, and visitors to voice their opinions and concerns about the potential impact of the tax on the local tourism industry. It remains to be seen how the implementation of the tourist tax will unfold and whether it will achieve its intended goals of supporting the community, enhancing the visitor experience, and ensuring the long-term sustainability of tourism in Edinburgh and beyond.
