Why a Tourist Tax makes sense for Edinburgh

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I have lived in Edinburgh since 1996 and it fills me with pride that the city can attract people from around the world to visit, study or work. Walking around our capital’s streets, however,  I also feel a little ashamed about what international visitors see.

Our roads are potholed. Too often, our footpaths are grubby and the bins are overflowing.

This is not a criticism of the City of Edinburgh Council’s hardworking staff. Their budget has been cut year on year and its right that education and social care budgets are protected as much as possible.

I do wonder, however, how long the SNP can continue with these cuts before permanent damage is done to our city.  It’s not as if the SNP elite in Holyrood could not choose an alternative path. In recent days they’ve forced the city to use the most regressive taxation power (council tax) because they won’t use the most progressive revenue raising power (income tax).

Worse than that, the Scottish Government limits the ability of Edinburgh to raise revenues in the same way cities around the world are able to.

Like Rome, New York, Vienna, Amsterdam and Paris, Edinburgh attracts tourist from around the world in droves. In 2014 3,795,000 tourists visited Edinburgh and stayed an average of 3.5 days – that’s 13 million overnight stays and goodness knows how many photographs taken of the castle.

Indeed the hotel industry in Edinburgh is booming – a 2015 study found there were over 20,000 rooms in Edinburgh and this could rise by 4,000 before 2020.

Unlike Rome, New York, Vienna, Amsterdam and Paris, however, Edinburgh has no hotel tax. If you stay a night in a New York hotel, the city gains $15. Likewise, in Paris a night in its very best hotel sees that city gain a more modest €1.20.

What I am arguing for is for every local authority in Scotland to be given the right to set a hotel tax. I fully expect that many councils will choose to set it a nil as their local tourist economy could not support it. Authorities like Edinburgh could, however, use the extra income to make the city a better place for tourists and Edinburgers alike.

A night in Edinburgh hotel during the festival ranges from £10 to an eye-watering £999, with most rooms falling within the £90 to £150 band. Taxing overnight stays in larger establishments at a modest 1% would not impact on the ability of Edinburgh to attract tourists, but would raise £10-20 million for the city.

A modest tax on this industry would help reverse the cuts to services and help ensure  Edinburgh continues to attract people from around the world to visit, study or work.

So lets give our local authorities the powers they need to better serve their citizens.  Let them decide if a hotel tax is what’s best for their city.

 

 

 

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