Tourism Leaders Call for Urgent Reform of Unworkable Visitor Levy

Industry unites behind an Expedited Visitor Levy (Scotland) Reform Bill to deliver a fair, transparent, and practical system

Scotland’s tourism and hospitality leaders have today called on the Scottish Government to urgently reform the percentage-based Visitor Levy model, warning that the current framework is “operationally impossible” and risks plunging local authorities and businesses into a regulatory and administrative crisis.

The Scottish Tourism Alliance (STA) and the Association of Scotland’s Self-Caterers (ASSC), supported by a broad coalition of industry bodies, are pressing for an Expedited Visitor Levy (Scotland) Reform Bill to replace the current percentage model with a simple, flat per-night levy – a system already proven in destinations such as Barcelona, Vienna, Amsterdam, and soon Wales.

Why reform is needed:

Post-legislative analysis has revealed that the percentage-based levy is structurally flawed and legally unsound. The model:

• Requires operators to strip out non-accommodation elements like meals or cleaning fees before applying the levy – something that major online platforms such as Booking.com and Expedia have confirmed they cannot technically do.
• Creates double taxation, as businesses become liable to pay VAT on levy income they do not retain.
• Imposes unmanageable administrative burdens, particularly on small and seasonal operators.
• Breaches UK consumer protection law, which requires guests to see a clear final price at the point of booking.

If left unchanged, the percentage model would lead to inconsistent application across councils, non-compliance, and potential legal challenge.

A fair and workable alternative:

The proposed Expedited Visitor Levy (Scotland) Reform Bill would:

• Replace the percentage model with a flat nightly rate, charged per person.
• Make the guest, not the business, the liable party, with operators acting in a facilitative role.
• Introduce digital collection mechanisms to streamline administration.
• Give local authorities flexibility to set caps on chargeable nights.

This approach has strong cross-party and cross-sectoral support and meets the Scottish Parliament’s test for an Expedited Bill – sudden, urgent, and important.

A moment for real policy partnership:

As the SNP Party Conference takes place in Aberdeen, industry leaders say the moment is right to demonstrate how evidence-led policymaking can deliver meaningful reform through partnership between government and industry.

The tourism and hospitality sector – one of Scotland’s most important employers and community anchors – stands ready to work collaboratively with Ministers and Parliament to design a levy that is fair, future-proof, and focused on outcomes, not administrative complexity.

Marc Crothall MBE, CEO of the Scottish Tourism Alliance, said:

“The current Visitor Levy framework is a disaster waiting to happen. It is not a question of political principle but of operational reality. Although the industry has for many years been against the principle of a levy, largely due to concerns over staying price competitive, it has accepted the bill passed through government and acknowledges the fiscal challenges of local authorities.”

“It also accepts the idea of a fair levy that, if used as intended to help grow tourism, enhance the visitor experience and in turn benefit local communities, it could be good in some destinations. That said, there must be an independent, detailed risk analysis and deep consultation with the industry and local communities before any final decision to apply it is taken.”

“It also requires just one charging application model that is workable for business and is legal, which the percentage model legislated for is not. The Scottish Government now has a golden opportunity to fix this before irreversible damage is done. The proposed Expedited Bill offers a pragmatic, evidence-led solution that protects businesses, gives certainty to councils, and keeps Scotland competitive as a world-class destination.”

Fiona Campbell MBE, CEO of the Association of Scotland’s Self-Caterers and Vice Chair of the STA Policy Working Group, said:

“Scotland’s tourism and hospitality businesses have worked in good faith to make this system work, but the evidence is now overwhelming: the percentage model cannot function in practice. A flat, per-night levy is not only simpler and fairer, it aligns with international best practice and consumer law. Ministers have shown openness to reform – now we need urgent action to deliver it. This is not retreat, but responsible reform that supports fairness, clarity, and sustainability.”