Important! This article is written by orangesmile.com editors and is protected by copyright law. The article can only be re-used with a direct link to www.orangesmile.com

New Tourist Tax Can Make Edinburgh the Most Expensive City in Europe

It is not a secret that many tourists think of transport and hotel prices at most when planning a budget for their next vacation. However, there are many charges that need to be taken into consideration as well, such as the price of dining, local transport, excursions, and tourist tax. The latter can, actually, be the game changer and Scotland is a proof of that. While hotels in Edinburgh are not the most expensive in Europe, the city is on the verge of becoming the new most expensive destination in the region because of the new tourist tax.

The Scottish Government decided to earn a little more on numerous guests of the capital. According to the new plan, visitors to Edinburgh will need to pay £2 or 2% of their room cost daily. The money will be sent directly to the government. Naturally, Edinburgh hotels are against this initiative. The introduction of the new Transient Visitor Levy (TVL) will increase tourist taxes and make the country’s hospitality industry one of the highest taxed in the world. As it was mentioned during the recent World Economic Forum, the UK currently occupies the 135th place in terms of global price-competitiveness.

If the new TVL comes into effect, Edinburgh will become the most expensive city in Europe, overcoming such famous tourist centers as London, Paris, and Rome. Not everyone thinks the new tax is a great idea. While it will bring more money to the budget, it may also cost the economy approximately £175 to 200 million a year. The UK Hospitality thinks it is not a good time to impose the tax in a current situation of uncertainty and needed jobs.

Naturally, Scotland’s accommodation and hospitality sector is against the tax and offers the government to work together in order to develop the sector and create more jobs. Currently, the industry provides jobs to tens of thousands of people. Millions of travelers visit the city every year, contributing to the local economy.

The recent study performed by STR Global shows that if the new tax is imposed, 15% of Edinburgh visitors will cut down their spending to pay the tax. 5% will prefer to stay outside the city in order not to pay £2 per night, and 2% of respondents said they would visit another city then. That would result in a decline in total spending of £94 million a year. In case the tax is charged across Scotland, the economy of the region would lose £205 million a year.

02.02.2019

Previous article / Back to news index

Stay in touch with the latest news of a worldwide hotel industry. All up-to-date analytics, reports, and news about hotel business trends on OrangeSmile.com.