Glasgow tourist tax 'could do more harm than good', warns hospitality industry

Glasgow must listen to accommodation businesses like hotels and B&Bs if it is to avoid rolling out a tourist tax which does “more harm than good”, trade bodies have said.

City treasurer Ricky Bell, SNP, will present councillors on Thursday with plans for a 5% visitor levy on accommodation spending in the city.

They will be asked to approve a formal consultation on the proposal, which is estimated to bring over £11m a year to Glasgow.

Money raised from the tax — which would apply to hotels, hostels, guest houses, B&Bs and self-catering accommodation — could be spent on improving the “look and feel” of the city and fund events.

Some trade organisations have already been consulted on the initial proposals, and they are urging the council to consider all the implications for businesses before introducing the tax.

Leon Thompson, executive director of UK Hospitality Scotland, said: “Scotland is already an expensive place to visit, and we believe that visitor levies will only harm our competitiveness and reputation as a destination for visitors, both from overseas and within the UK.

“We are urging any local authorities considering a levy to first consult with businesses and local communities to work out if a levy is the best approach for their area, before moving onto developing a scheme.

“I’m pleased to have been involved in the consultation process with Glasgow City Council on its plans so far, and we’re working alongside the Greater Glasgow Hotels Association to represent the views of local accommodation businesses.”

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said Edinburgh had rushed “headlong into introducing a tourist tax”, and other councils should “take stock and tread carefully”.

The consultation process must “listen to the voice of business who will ultimately be responsible for administering this scheme”, she added.

“Tourism is a growing part of Glasgow’s economy so we expect a full economic impact assessment to accompany the proposals.”

Ms Campbell said any levy must have “thoughtful implementation at its heart, and monies raised for tourist infrastructure only”, adding: “Failure to take these steps could result in a policy that erodes the very industry it is supposedly intended to support.”

She also said the 5% levy would be subject to 20% VAT, which is “something unheard of in Europe”, where tourist taxes are common.

Ms Campbell added the levy would not only be paid by “foreign tourists”, but “one applicable to ordinary Scots staying overnight in Glasgow, those who have already made a financial contribution to local services”.

“Regressive short-term let licensing and planning policies are currently putting many small businesses at Glasgow at risk,” she said. “If even more close, that will lower the amount that could be raised from any levy.

“As a dynamic and leading destination, Glasgow needs a wide variety of accommodation, especially with key events like the upcoming Commonwealth Games.

“We understand the rationale behind a visitor levy but a badly implemented policy will do more harm than good. Our overriding message to councillors is simple: do it right, first time.”

A report by Cllr Bell stated a 5% rate has been recommended as it would “provide a reasonable level of income to achieve the scheme objectives after allowing for administration costs”.

It added accommodation providers did raise concerns about the economic impact of a levy, but it is believed a “reasonable charge will not affect the number of visitors to a location”.

“In fact, it seems from past studies that they have little effect on the number of visitors,” the report continued.

“At this stage there is no evidence to suggest that the introduction of a levy in Glasgow will have an adverse effect on visitor numbers. However, if introduced, these numbers would be closely monitored.”