On a “Tourist Tax”: Edinburgh Hotels Are How Much?

CSPP Chair Professor Richard Kerley argues that allowing local authorities to set a limited transient visitor levy, or “tourist tax”, will not act as a disincentive for potential visitors. For more CSPP proposals regarding local taxation, see our submission to the Commission on Local Tax Reform


Of course introducing a ‘transient visitor levy‘ will drive Edinburgh visitors away – just common sense isn’t it.

Why pay an extra 1% on your hotel bill when you could stay in … oh – Berwick, or St Andrews, or Falkirk, for a much lower nightly rate?

Essentially this appears to be the main [and just about only] argument from those who oppose even the idea of discussing a ‘tourist tax ‘ for Edinburgh.

The problem is, such an argument doesn’t hold a lot of water whether here in Edinburgh or for that matter anywhere else that tourist taxes are applied. France has had a ‘tax de sejour ‘ for years and remains the top tourist destination in the world.

People stay in Edinburgh and pay hotel rates that can often be very high indeed – if they can get a hotel  - because  there are good reasons for wanting to be here.

So, for example, I live quite near a perfectly reasonable and typical branch of a hotel chain that I have stayed in when travelling and or working elsewhere. It’s not my first choice of chain in the hotel category that I describe as ‘wardrobe/bed/shower/breakfast and meals elsewhere’ but it is of a type that is increasingly successful. There are about 10 of the same badge in and around the city. I  pass it often enough to recall the ‘Rooms from £29’ sign, so as a matter of academic curiosity I have tracked room rates there over recent  years  at certain times of the year .

What such tracking shows is that the ‘£29 per night ‘ may be occasionally available – in Mid-January / parts of February but not during peak demand periods . The same type of hotel room does double in price, and sometimes triple in price, for Saturday bookings in the middle of July and the busiest periods in the Edinburgh Festivals. The same phenomenon can be seen at Christmas and even more so Hogmanay .

Over this past weekend  where the late afternoon timing of the  Calcutta Cup match allowed Saturday travel for visiting fans the ‘spike‘  was even more dramatic. The same type of hotel room, same hotel, slightly off centre went from £54 on Friday; £184 Saturday; back down to £42 Sunday.

Trivago are currently projecting hotel rates in Edinburgh for the French match in March to almost double in price.  The same company suggest rates in Cardiff for the Welsh - French match have moved from £122 to £510 per night. That either says something about Cardiff – which I recall  to be slightly under provided with hotels – or the comparative merits of Scottish and Welsh rugby .

What it also says is that visitors are not likely to be put off by a small percentage ‘tax de sejour ‘ of 1% or 2% on their hotel bills.

There are some [manageable] problems with TVL on overnight stays but they can be overcome with intelligent design.

The last thing to fear is a tourist tax will drive visitors away.

Centre for Scottish Public Policy
c/o Digby Brown LLP
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