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UKH & hotel sector leaders write to Scottish Gov over damaging tourist tax

Leaders of major hotel and hospitality groups have written to Derek Mackay MSP, Scottish Finance Secretary, voicing strong opposition to Scottish Government plans for a tourist tax and warning of its damaging impact to the visitor economy.

The letter has been co-ordinated by UKHospitality (UKH), the single, authoritative voice for the hospitality sector.

The Scottish Government is currently consulting on the principles of a Transient Visitor Levy - also know more commonly as a tourist tax - that could be implemented by local authorities.

Last week, UKHospitality published analysis that demonstrates the economic and employment cost of a tourist tax in Scotland. The analysis finds that if a tax was introduced it will lead to a hit to the Scottish economy of over £200m and the loss of nearly 6,000 jobs.

The pain would be felt all across Scotland, but the analysis shows the hardest-hit areas are Edinburgh, Glasgow and the Highlands. The tax will also increase the costs of domestic tourism for Scots and deter visitors from overseas.

Kate Nicholls, CEO of UKHospitality, said, “The senior-level signatories of this letter demonstrate the level of concern about how this ill-thought through proposal will damage Scotland’s reputation as a world-class tourism destination, increase costs and put thousands of jobs at risk.

'The hospitality sector is already over-taxed, with sky-high business rates and one of the highest VAT rates in Europe. It is time that this proposal was shelved and for the Scottish Government to discuss with business how we can secure a bright and sustainable future for Scottish business.”

Full text of the letter to Derek Mackay

To: Derek Mackay, Finance Secretary

CC: Fiona Hyslop, Cabinet Secretary for Culture, Tourism and External Affairs
Kate Forbes, Minister for Public Finance and Digital Economy

Dear Finance Secretary,

We strongly urge the Government to reconsider the introduction of a ‘Transient Visitor Levy’ or Tourist Tax, which has the potential to damage Scotland’s visitor economy, impose additional costs on Scottish accommodation businesses and make them less competitive with other European destinations. It will overburden both families travelling within Scotland and inbound visitors from other parts of the UK and Europe alike.

Accommodation businesses generate £2.7bn in turnover, supports 50,000 jobs and already contributes some £720m annually in tax. A tourist tax does not meet standards for fair taxation as it picks out just one sector for punitive cost increases. It imposes a substantial bureaucratic burden and cost upon Scottish hotels and accommodation businesses that will need to change systems and procedures dictated by third parties.

Such a tax will make Scotland less competitive with rival tourism nations across Europe - all of which enjoy lower VAT on hospitality. It provides no clear answer on how to tax rooms and properties listed on online rental company platforms and cruise ship arrivals. The tax will bypass day visitors (95% of Scottish tourism visits), whose local environmental impacts are significant, yet who spend significantly less than overnight visitors in our high streets’ shops and in hospitality venues. Crucially, it will be an added burden on Scottish families who holiday domestically; incentivising them to cross the border to England or to fly abroad, hitting local businesses.

If the Scottish Government truly wishes to ensure that Scotland retains its reputation as an open, warm and competitive destination, this tax measure is incompatible with that. The plans for this tax should be stopped to ensure the future competitiveness of Scottish tourism.

Yours sincerely,

Kate Nicholls, CEO, UKHospitality
Thomas Dubaere, COO Northern Europe, Accor
Simon Jones, Managing Director, Premier Inn and Restaurants UK, Whitbread
Rob Paterson, CEO, Best Western Hotels
Frank Whitaker, Vice-Chair, Aberdeen City & Shire Hotel Association
Nicola Taylor, CEO, Chardon Hotels
Stephen Leckie, CEO, Crieff Hydro Family of Hotels
Emmanual Moine, General Manager, The Glen Mhor Hotel and Apartments, Chair of Inverness Hotel Association
Janice Fisher, General Manager, Novotel Glasgow | Ibis Glasgow City Centre, Chair of Greater Glasgow Hotel Association
Karan Khanna, MD of UK & Ireland, IHG
Gavin Ellis, Proprietor, Knockomie Hotel, Forres
Calum Ross, Proprietor, Loch Melfort Hotel, Argyll and Chair of UKH, Scotland
Neil Ellis, Group Operations Director, Place Hotels, Chair of Edinburgh Hotels Association
Helen McBride, General Manager, Old Course Hotel, Golf Resort & Spa
Russell Imrie, Managing Director, Queensferry Hotels and Vice-Chair UKH, Scotland