Proposals to introduce a tourist tax on accommodation in Edinburgh have won strong support in a public consultation.
Nine in 10 residents and more than half of accommodation providers said they backed the introduction of a Transient Visitor Levy (TVL) in the capital.
The city council’s draft proposals suggest a charge of either 2% or £2 per room per night, chargeable all year round on all forms of accommodation, including short-term lets, but capped at seven nights.
More than 2,500 people responded to a public consultation on the proposals, with 85% of those who replied backing the plans.
More than half (51%) of accommodation providers and 91% of residents said they support the introduction of a TVL.
Adam McVey, City of Edinburgh Council leader, said: “Once again, we are finding that there is a huge swell of support for a tourist tax in Edinburgh with residents and all types of business backing a scheme that is fair, sustainable and one which would be reinvested into the ongoing success of our tourism and hospitality industry and the services which matter most to local people.
“Edinburgh welcomes over four-and-a-half million visitors annually, spending over £1.8 billion.
“Our tourist economy is extremely strong and expected to continue to grow. A majority of businesses agree the vibrancy of our industry wouldn’t be threatened by a small levy but would benefit from the additional investment.
“Interestingly, this includes more than half of accommodation providers, dispelling fears in certain quarters that the industry wouldn’t support a TVL.”
The council said it is estimated that the proposals could raise between £11.6 million and £14.6 million per year.
The majority of respondents (72%) agreed that Edinburgh’s TVL should be set at a rate of around £2 a night or 2% of the cost of accommodation, while 19% felt this was too low
Almost half of respondents (47%) prefer the option of a flat ‘£ per night, per room’ rate but 38% would rather see a charge introduced which is based on the percentage of the room fee.
A final proposal on how the council hopes to take forward a TVL scheme will now be developed for approval by elected members in February, before being passed to the Scottish Government as it considers its position on the legal framework for a TVL.
John Donnelly, chief executive of Marketing Edinburgh, added: “Combined with Marketing Edinburgh’s own independent research – which found that 88% of summer visitors would still come to Edinburgh if a £2 per room, per night charge were in place and that 59% of residents are in favour – the results are conclusive. A transient visitor levy is a widely supported means of keeping the city at its best for residents, visitors and businesses alike.
“There is a real need to manage our success as a leading destination, and with Transient Visitor Levies used to great effect throughout the world, it’s encouraging that the public welcome the City of Edinburgh Council’s plans to help secure sustainable investment in Edinburgh’s growing tourism industry.”
UK Hospitality (UKH) said it is in no doubt that the “vast majority” of accommodation businesses in the city are opposed to a TVL.
The total number responding to the survey represented around 8% of the city’s accommodation businesses, it said.
Executive director Willie MacLeod said: “UKH opposes the introduction of a TVL in Edinburgh, or for that matter anywhere in Scotland, primarily on grounds of price-competitiveness.
“The UK is one of only three EU countries which do not apply a reduced rate of VAT to accommodation and tourism services (on average, the rate of VAT on accommodation in the EU is around half of that in the UK).
“Moreover, while it is true that many EU countries do impose some form of tourist or bed tax, this is done against a much lower rate of VAT. To impose an additional tax on visitors to Edinburgh and Scotland is potentially damaging to tourism and fails equitably to compare the competitive position.”
He said UKH has estimated that the annual negative economic impact which will arise from the imposition of a TVL at £2 per room, per night, will be £175million to £200million in Scotland (£44million – £94million in Edinburgh) – “far greater than the amounts expected to be raised by a TVL”.