Edinburgh tourist tax: Festival cast and crews should be exempt from tourist tax say festival bosses

Festival performers and crews should be exempt from the tourist tax in recognition of their poor pay and the boost they give to Edinburgh’s economy, Festival bosses have said.

Umbrella organisation Festivals Edinburgh argued in its submission to a Scottish Parliament consultation on the proposed Visitor Levy legislation that the thousands of cast and crew who come to the city in August should not have to pay the Capital’s planned levy on overnight accommodation.

Festivals Edinburgh director Julia Amour said the festivals collectively benefited the city’s businesses, employees and sole traders to the tune of £407 million in 2022, a return of over £37 for every £1 of public grant. “The cultural sector does not have a high average wage and these workers are travelling in order to contribute to the leisure and visitor economy at their destination. In the case of Edinburgh, this category includes the casts and crews who deliver Edinburgh’s Festivals, of whom an estimated 17,000 require accommodation.”She welcomed the provision for exemptions in the Visitor Levy Bill. And she added: “We will make representations at national and local levels about the importance of identifying cultural business visitors who should be exempted or reimbursed, so they are not being priced out of the places they are supporting by their presence.”

Other responses to the consultation included calls for the tourist tax to be extended to cover campervans and cruise ships and changing the rules on how the revenue is spent. More than 780 individuals and organisations sent in their views on the plan to allow councils to impose a percentage levy on the cost of overnight accommodation, with the money raised being invested in services and facilities largely used by tourists.

Essential Edinburgh, which represents 620 city-centre businesses, described the visitor levy as "an acceptable mechanism" for supporting the visitor economy and said so long as it was kept below five per cent it should not affect visitor numbers. But it emphasised: "All money collected must be used to support the needs of tourists and investment in the assets of the city that attract visitors. It is imperative for the credibility and operation of the scheme that the revenues raised are directly spent on the visitor economy and not used by a local authority to supplement other areas of their work."

It suggested that as well as core services and facilities used by tourists, revenue could be invested in visitor attractions and heritage sites, cultural programmes, and marketing and promotion of destinations. "We would welcome the objectives being exceptionally tight and narrow with a small number of key areas eligible to receive financial support."

‘UK taxpayers will question why they have to pay’

Edinburgh Hotels Association said it had "accepted that this policy will be implemented". But it said it had consistently argued against a levy because of the "administrative and cost burden on our businesses" and claimed a levy would undermine Edinburgh's ability to provide competitively priced accommodation.

It advocated a charge per night with a maximum cap rather than the proposed percentage levy, which it argued was harder for businesses to calculate. And it noted: "Overnight stays by residents of Scotland and from the rest of the UK to Edinburgh will be impacted, as UK taxpayers question why they are required to pay yet more tax to stay in their own country."

East Lothian Council voiced concern about the extra admin burden on both the council and businesses and said it had not yet worked out whether the benefits outweighed the costs. But it said: "Ministers should consider how ‘wild’ camping, motor caravans (campervans), and static caravans are treated. For example, would a power exist to collect a levy from those using under-pressure rural or coastal areas for camping, and could a levy be applied to motor caravans parked overnight outwith an established camp / caravan site. In both instances this type of activity can put pressure on local infrastructure and resources."

And it said there should be guidance to make clear whether the permitted uses of the money raised included the maintenance of roads and footways with significant seasonal visitor footfall and additional refuse collections.

Surgeons Quarter, the commercial arm of the Royal College of Surgeons of Edinburgh, which runs an onsite hotel, Ten Hill Place, said it was totally opposed to the levy. "Hospitality businesses already pay VAT at 20 per cent, which is higher than many other countries, pay business rates which are calculated on turnover as well as PAYE, national insurance etc." And it described the levy as a "cash grab on business with monies simply going into a black hole".

Edinburgh Trade Union Congress strongly supported the levy proposal, but said the rules on how the revenue could be spent were "far too prescriptive". It said: "It seems to exclude measures that might be focused on local residents. For example, many people face barriers – poverty, disability, poor transport etc – that make it much harder for them to engage with cultural and leisure opportunities."

And the Edinburgh TUC also suggested: "The impact of cruise ships on local infrastructure can already be seen, so finding a way to ensure they make an appropriate contribution is important."

Edinburgh Chamber of Commerce said it generally supported a visitor levy, but on the condition that revenue was reinvested into the sector, and that industry was properly involved in both setting the rate and deciding how the money can best be invested. "The tourism and hospitality sector has been under-supported for a long time, particularly in the aftermath of the Covid pandemic – this would be an opportunity for local authorities to invest in and support the sector through its recovery,"

Committee will now report ahead of first vote by MSPs

Edinburgh Tourism Action Group said the levy would have "a significant positive impact on the visitor economy of the city". But it was among several respondents arguing that the current wording of the legislation, about revenue being used for services and facilities used by people visiting "for leisure purposes", neglected the importance of business visitors.

And Edinburgh City Council, which campaigned hard for the legislation, argued strongly for the levy, saying research on other European cities found no evidence that an overnight charge on accommodation would reduce demand or bookings. "In fact, cities such as Amsterdam have continued to see a rise in visitor demand despite increasing its tourist tax level."

It pointed out Edinburgh welcomed a large number of business visitors – accounting for 12 per cent of overnight stays in 2021 – and suggested the wording of the legislation should be changed. "It would not be right to be unable to spend the revenue raised on activities specifically aimed at them, such as convention bureau activities, subventions and business events marketing."

Green MSP Ariane Burgess, who is convener of the parliament's committee, said the number of responses to the consultation was "tremendous" and the committee would now take time to consider them before producing its report on the Bill ahead of MSPs' first vote on it.