ABERDEEN City Council has agreed to a public consultation on a visitor levy in the city, similar to the one approved in Edinburgh just last month.
The consultation is based on a rate of 7% on overnight stays, compared to the 5% charge per night in Edinburgh, which will come into effect in July next year.
Profits from the visitor levy are expected to be invested back into Aberdeen’s tourism industry and with the hopes of therefore improving the city’s economy.
Legislation allows local authorities in Scotland to charge a tax on overnight stays in certain types of accommodation, usually capped at a maximum number of nights.
Different rates can be set for specific areas, purposes or events, but the type of accommodation the levy applies to cannot be changed.
The City of Edinburgh Council voted to introduce a tourist tax in the city last month, which is estimated to raise £50m a year which will be invested back into businesses, projects, and infrastructure that support the visitor economy.
It was met with mixed responses from locals and visitors alike, with some concerned that tourists will be put off by increases to the already sky-high accommodation rates in the Scottish capital.
Business owners also felt pressure to enforce the levy, with 51% believing that a 5% charge is too high.
Others applauded the scheme as a way to protect and improve the city’s world-famous sights and attractions.
Aberdeen, however, has set its sights on a 7% charge, which would produce a levy of £5 per night on an average hotel room of £70 a night.
It could apply to hotels, bed and breakfasts, hostels, guest houses, self-catering accommodation, camping sites, caravan parks, accommodation in a vehicle, or on board a vessel which is permanently or predominantly situated in one place.
Convener of finance and resources Councillor Alex McLellan said: “Aberdeen City Council has developed the visitor levy scheme with key stakeholders which will now go out to consultation.
“There is the potential for the scheme to raise significant funds to help support our ambition to be a leading visitor destination.
“Our decision around whether or not to introduce a visitor levy will be informed by the consultation as it is important to consider the views of the trade, and a key part of that discussion will be around how the council could use the funds to boost the city’s economy, increase visitor numbers, and, in turn, fill hotel rooms.”
Chair of the Aberdeen City and Shire Hotels Association Frank Whitaker said: “It is fair to say that the hotel sector lobbied hard against legislation for a visitor levy.
“However, the law now enables local authorities across Scotland to implement a visitor levy, so it is incumbent on industry to work with local authorities to develop effective schemes that support local economic growth.
“The introduction of a visitor levy scheme in Aberdeen City has the potential to be a positive economic growth lever if correctly invested, benefitting not just all types of visitors to Aberdeen but also local residents.”
Administering the levy is left to the accommodation themselves, as some have said that this would unfairly tax Scots staying overnight in Aberdeen or visiting for work.
Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “Aberdeen City Council are putting the cart before the horse. If they desire to grow their tourism-related economy, this is precisely the wrong way to go about it.
“A punitive rate of 7% would be more than that envisaged by other cities like Glasgow or Edinburgh.
“Moreover, it is important to understand this is a tax on a tax: the 7% levy itself would be subject to 20% VAT, something unheard of in Europe.
“Aberdeen Council must take stock, tread carefully and listen to the voice of business who will ultimately be responsible for administering this.
“Overall, any levy must be set fairly, have good governance and thoughtful implementation at its heart, and monies raised for tourist infrastructure only.
“Failure to take these steps could result in a policy that erodes the very industry it is supposedly intended to support.”
