Orkney decides against introducing tourist tax on overnight stays

Councillors in Orkney have decided against adopting an overnight visitor levy.

However, there is still interest in other kinds of so-called “tourist taxes” such as a point of entry charge.

Councillors were given powers by the Scottish Government to implement an overnight tourist tax this month.

It could cover certain types of accommodation but not others, most notably cruise ship passengers.

Elected members on Orkney council’s policy and resources committee were presented with a report on the issue this morning.

It laid out the findings of a consultation firm which had looked into whether Orkney should adopt an overnight visitor levy.

Recommendations were given by the council’s own officials, which said the local authority shouldn’t move forward with the implementation of an overnight visitor levy at the moment.

But, they said the council should instead continue to engage with the Scottish Government and stakeholders on “alternative tourism levy models appropriate to an island context”.

What’s behind Orkney’s overnight ‘tourist tax’ decision?

Orkney and Shetland’s councils, along with the Western Isles council, Comhairle Nan Eilean Siar, had jointly commissioned consultants, Urban Foresight, to do £35,000 “feasibility investigations” on implementing an overnight visitor levy in their areas.

Those investigations included stakeholder engagement with the local community, businesses, and visitors.

The consultants estimated that an annual 5% levy would generate £3,880,740.52 over ten years.

However, the financial viability was deemed “borderline”, when factoring in administrative complexity and long-term risks.

The benefits are still described as “marginal” by the consultants.

The money raised through a levy would be spent on infrastructure and environmental conservation,

The consultants found “widespread opposition” to an overnight visitor levy among both businesses and residents.

‘Widespread opposition’ to Orkney overnight visitor levy from businesses

From businesses, there were concerns about an “increased administrative burden” and business costs that would come with that type of levy.

As such there would need to be a period of “hand-holding” between the council as much as 20% of business owner while a levy was brought up and running.

There were also concerns that it would make Orkney “uncompetitive” as a place to visit.

Many felt an overnight levy was “unfair” as it missed out “high-impact” visitors such as those arriving on cruise liners.

Surveys found a majority of Orcadians supported a point of entry levy also covering cruise ship arrivals.

The consultants said Orkney’s geography would be suited to this, and it would be easier to administrate.

North Isles turn down overnight visitor levy – but other areas haven’t

Orkney’s council isn’t alone in its opinion on an overnight levy.

Earlier this month, Shetland also decided against adopting tourist tax.

In June, the Western Isles “paused” its plan to develop an overnight tourist levy.

However, other areas have been in favour.

Councillors in Edinburgh and Glasgow approved a 5% charge on overnight stays in hotels, hostels, guest houses, B&Bs and self-catering accommodation

In August, councillors in Aberdeen supported implementing a 7% visitor levy.

And other areas in Scotland are weighing up the options.

What did the councillors say about the Orkney overnight tourist tax?

Orkney’s councillors appeared unanimously against the introduction of an overnight levy.

Councillor Leslie Manson said: “There’s no question that the additional demand on our infrastructure and struggling with to pay for the services we’ve got leads to the conclusion that we must take advantage of this opportunity.

“But it’s got to be a simple system, easy to operate and easy to understand. It’s got to be fair.

“We have to listen to the respondents who objected.

‘We need to be patient’, says Orkney councillor

“It’s important that we keep in step with our island partners.

“The three speaking with one voice is a powerful voice to the Scottish Government.

“This is not the time to be bouldering on to get an early buck out of this.

“We need to be patient.”

Councillor Mellissa Thompson said she was glad to see the proposals “being put on the shelf”, even if it did cost the council “nearly £12,000”.

Speaking after the meeting, Orkney MSP Liam McArthur said the decision was “unsurprising”.

He said: “There is no doubt that more resources are needed to invest in infrastructure and services.

“However, a point-of-entry levy has the benefit of not placing an administrative burden on small accommodation providers and removes the need for a wide array of exemptions to avoid capturing those travelling within Orkney for work, health and family reasons.

“The clear message from Orkney, Shetland and the Western Isles is that more bespoke solutions are required.”