The Stage

Edinburgh considers bed tax on city hotels

Published Wednesday 7 December 2011 at 13:56 by Thom Dibdin

Edinburgh City Council has taken a step closer to imposing a tourist bed tax on all visitors staying at hotels and guest houses in the city, including performers in the Edinburgh fringe.

A meeting of the council’s policy and strategy committee agreed unanimously to investigate the possibility of a “transient visitor levy” at its meeting on Tuesday. Council officials will provide a report within one cycle, setting out the legal position, whether it would need legislation at Holyrood and the potential for a voluntary or statutory levy.

Proposing the tax, Green councillor Steve Burgess said there is “potential of a relatively small levy of around £1 to £2 per night to generate at least £5 to £10 million per annum and that this scale of levy is unlikely to discourage visitors or affect the hotel trade.”

The council spends nearly £3.3 million a year on grants and subsidies for the city’s 12 key festivals, which run year-round. It is facing a council tax freeze and the need to reduce costs by £90 million over the next three years.

The proposed tax would effect visitors staying in hotels and guest houses. There is no indication it would be levied on the private short-term lets used by many performers at the Edinburgh fringe.

A spokesman for the Edinburgh Festival Fringe Society was not able to comment on the effect on performers, but told The Stage it is “always interested in investigating options”.

A bed tax in Edinburgh would be the first in the UK. Similar schemes are already in operation around the world, particularly in prime tourist spots such as Venice and New York.

The proposal has divided opinion in Edinburgh. A leader in The Scotsman broadly welcomes the proposal, stating: “Provided the council uses the money to promote the city or support the festivals, and not as an extra council tax to avoid difficult financial decisions, they should press ahead with the simplest, logical, option of the bed tax.”

Edinburgh’s hoteliers are not as welcoming. Colin Paton, chairman of Edinburgh Hotels Association, said: “It discriminates against the hotel industry and does not respect the existing tax structures of the UK. We already pay a profit-related property tax, then we’ve got corporation tax and income tax, so this seems very unfair.

“As we are about to enter the pan-European, global double-dip recession and what has been described economically as the lost decade, we must protect the industry and certainly not kill the goose laying the golden eggs for the city.”