Edinburgh: Voluntary Hotel Tax

Tourism leaders are planning to introduce the UK's first voluntary bed tax in Edinburgh, to raise up to £5m a year to protect the city's cultural heritage.

A compulsory levy imposed by the city council has been rejected by businesses as it would damage the capital's ability to compete with other European destinations, such as Dublin and Paris.

But a report commissioned by Edinburgh Tourism Action Group says voluntary schemes in other cities have proved successful in raising funds for tourism-related projects while avoiding the pitfalls of a statutory tax.

Edinburgh's hotels and guesthouses, which would collect the levy, provide around 12,000 beds per night. Consultant Deloitte Touche has calculated that with, on average, 78% of beds occupied every night, a £1 levy could raise more than £3m and a £2 levy around £5m. If the scheme goes ahead, funds could be spent on environmental initiatives and cultural projects to enhance the city's appeal to tourists. Simon Williams, of ETAG, said: "Studies have found that if you ask people in the right way to contribute towards a destination then there is a good response. ETAG will now be looking at whether this can be applied to Edinburgh." One motivating factor was that public funds from bodies such as the city council, the Scottish Executive and Scottish Enterprise may be cut in future because of other priorities.

scotlandonsunday.scotsman.com

5 March 2007