The STA Member Council is firmly of the view that applying any further regulated costs to visitors within the current climate of UK and Scottish taxation is not the right approach to take.
While a tourism tax/visitor levy may work well for tourism businesses, destinations and local authorities in other global destinations where the level of VAT on tourism services is lower than that of the UK, the idea must be examined within the context of: the UK having the second highest VAT rate in Europe at 20%; the challenges which exist to the imposition of an additional tax; the impact on price-sensitive visitors and indeed the impact on businesses already coping with the ‘perfect storm’ of rising costs that tourism businesses in Scotland currently face.
We would also highlight that whilst the exchange rates are currently favorable for our international markets this may not persist beyond the short-term and the fact remains that around 60% of Scotland’s tourism spend comes from our already squeezed domestic visitors. Any further tax or levy applied could seriously dilute this market. What is that tipping point for domestic consumer spend within the tourism sector of an overpriced economy?
The UK is second from bottom in the World Economic Forum ranking, 135/136, when measured solely on international tourism price-competitiveness; this is in stark contrast to its overall ranking of 5th in the world when the full range of international tourism indicators are included. This underlines that the introduction of a tourism tax or any such visitor levy would further reduce the competitiveness of our already heavily taxed sector relative to competitor destinations. Any new tax on tourists or the businesses serving them could ultimately have a potentially devastating long-term impact on Scotland’s tourism industry and local economies which could lead to potential job losses. It would also in our opinion negatively impact businesses, beyond the accommodation sector that would be expected to collect any tourist tax, that rely on the tourism economy by reducing visitor spending right across the industry; in pubs, restaurants, shops, cafes, visitor attractions and entertainment venues.
It should also not be ignored that tourism businesses already contribute significantly towards enabling public sector spending through high levels of business rates with many also contributing to local BIDs to which invest in the destination. Over and above this many tourism businesses also provide direct funding support as members of their local destination marketing bodies on top of investing in their own business marketing and promotional activity which, of course, benefits the destination overall.
The need for Scotland to remain, and indeed become more competitive as a destination for visitors to travel to and spend money in is now greater than ever in relation to our impending exit from the EU. Applying any additional taxation or levy to visitors in the current economic conditions and tax regimes that are currently in force is not the answer.
The STA Member Council is pleased that the Scottish Government acknowledges our reservations on this and has, thus far, reaffirmed its stated position not to legislate to allow local authorities to introduce any such tax or levy. The STA Member Council is of the view that any change to this position should only be considered in the light of an objective and well-informed national debate, following conduct of independent research, undertaken by a suitably experienced firm or, perhaps, SPICE (Scottish Parliament Information Centre) and formal stakeholder consultation initiated by the Scottish Government. The STA Member Council will be very willing to participate in preparation of the research brief and in shaping the framework of a programme of consultation.
Only if there is clear evidence that there would be no negative impacts on the Scottish tourism economy, and its component businesses, including, tourism employment and importantly, the commercial accommodation sector which is likely to be at the forefront of collecting any additional tax, would the STA Member Council then be open to reconsidering its current position.
The STA Member Council organisations that are signed up to this statement are:
- Association of Scottish Visitor Attractions (ASVA)
- Association of Scotland’s Self Caterers (ASSC)
- Argyll & Isles Tourism Co-operative (AITC)
- British Amusement Catering Trade Association (BACTA)
- British Holiday Parks & Homes Association (BH&HPA)
- Caravan & Motorhome Club
- Confederation of Passenger Transport UK – Scotland
- Destination Orkney
- Farm Stay
- Federation of Small Businesses (FSB)
- Green Tourism
- Hostelling Scotland
- Outer Hebrides Tourism (OHT)
- Scottish Bed & Breakfast Association (SBBA)
- Scottish Beer & Pub Association (SBPA)
- Scottish Country Sports & Tourism Group (SCSTG)
- Scottish Destination Management Association (SDMA)
- Scottish Licensed Trade Association (SLTA)
- Sail Scotland
- U.K. Hospitality [Edinburgh, Glasgow & Inverness Hotels Associations]
- Wild Scotland