iStockIt’s been a month since Edinburgh introduced Scotland’s first visitor levy, with those staying overnight in the city now paying an additional 5% charge.
The mandatory, city-wide tax sees those staying in hotels, B&Bs, short-term lets and other forms of tourist accommodation charged an additional 5% surcharge on the first five nights of their stay.
While the council estimates the scheme has already generated around £5m, there are fears it could add to the cost pressures facing performers and visitors alike.
‘It’s salt in the wound’
STV NewsFringe veterans 360 Allstars have been coming to Edinburgh every August for the past ten years.
After each performance, they meet audiences to sell merchandise, helping maximise their earnings as they’ve seen first-hand how accommodation costs in the city have spiralled.
Producer Gene Peterson told STV News: “The visitor levy is not 5% added on to reasonable accommodation costs; it’s added on to exorbitant costs.
“Accommodation costs are hugely inflated by limited supply and overwhelming demand. We have to accommodate so many bodies at an inflated figure, and to add a visitor levy on top is pouring salt into the wound.”
It comes after the Scottish Ballet called for a relief scheme for national performing arts companies, warning that touring to Edinburgh is “fast becoming unsustainable”.
Gene said he knows of a number of companies who have said they won’t return to the Fringe.
“It’s extremely difficult to make the Fringe work financially. People are putting it on with blood, sweat and tears. It’s their own back pockets they’re dipping into to present these shows.
“It makes no sense to punish the artist, when the Fringe doesn’t exist without those artists, and make it even tougher to present themselves.”
‘Every extra bit of cost adds up for families’
iStockThe Scottish Tourism Alliance has raised concerns over the potential effect on Scotland’s tourism and hospitality sector, warning the levy arrives at a time when many businesses continue to face rising costs and mixed trading conditions.
Mark Crothell, chief executive at the Scottish Tourism Alliance, claims soaring costs are already having a knock-on impact.
“Ticket sales are great, but we’re hearing a softening of expenditure by visitors across the country, be it visitor attractions or elsewhere.
“If people aren’t spending because they have to spend money on a levy, is it now just a one-course meal, half a bottle of wine, a glass of wine, or do you grab something from a supermarket and eat it in your room?
“Every bit of extra cost on top of holidaying at home is now a consideration taken by families when they’re choosing to go somewhere.
“If you’re a parent, you know all too well you’ll be paying in multiples. If you’re paying a levy on top, something has to give. If suddenly you’re unable to buy the kids ice creams, you might stay at home and avoid that tantrum.”
‘The festival will slowly decline without support’
Fringe organisers have called for the council to ringfence around £1.7m in funds from the visitor levy to reinvest into the festival.
The Fringe Society received £75,000 from the council this year, despite the festival generating an estimated £500m for the economy annually.
Assembly founder William Burdett-Coutts, one of the Fringe’s largest venue operators, is among those who would like to see some of the money raised through the levy invested back into the festival and the artists who make it possible.
“Quite a few acts have pulled out because they couldn’t afford it and make the numbers add up,” he said. “The feedback we’re getting is that it’s getting too expensive to come here.
“A lot of performers see Edinburgh as beneficial because it feeds into touring year-round, but they take a loss in Edinburgh and have to earn it back on the road.
“We rely on people taking a big risk to come and perform those shows, and we need to make it easier for them.”
Aside from the levy, he said more should be done to address soaring accommodation costs during the Fringe.
“There has to be a major effort to stop people price-gouging. Landlords and hotels, there needs to be a concerted effort on the part of everyone. People have to be more reasonable.
“The festival will slowly decline if we don’t think things through.”
‘A modest levy helps maintain the city’
STV NewsWith other parts of Scotland now looking to introduce visitor levies, and cities including Glasgow and Aberdeen pushing ahead with plans for next year, there’s growing pressure on Edinburgh to get the balance right.
Jane Meagher said £5m has already been raised over the last four weeks, helping fund city policing, street cleaning and the renovation of buildings including the Old Royal High School and Leith Theatre.
She said the five-night cap was introduced to make the levy more affordable for people staying in Edinburgh.
Meagher also argued the focus should be on tackling dynamic pricing, with some accommodation providers increasing prices by up to 70%.
“A modest 5% levy doesn’t make a massive difference. What does make a difference is huge hikes in hotel prices.
“I think legislators need to look at that because it clearly affects not only visitors and performers but also businesses.”
She added: “We value very highly the organisations that make the festival happen. What we’ve got to think about is the broader context. We look after the city the whole year, not just when these organisations are in the city.
“The people of Edinburgh have put their public money into the Fringe over many decades. If we don’t make sure the city remains fresh, clean and well-kept, it’s going to lose its appeal and attractions.
“That’s what makes the city vibrant and we have to maintain that. That costs money.”
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