Principles of a Local Discretionary Transient Visitor Levy

The Scottish Government is consulting on its plans to legislate to give local authorities the power to implement a local Transient Visitor Levy.

Our tourism industry is one of the great strengths of the Scottish economy. There has been a welcome increase in the number of visitors to Scotland in recent years, supporting inclusive growth and job creation. The rapid growth in the use of online platforms such as Airbnb has facilitated much of this rise.

However, higher levels of tourism and an intensified visitor footprint have greatly increased pressures on the capacity and sustainability of local infrastructure and public services in some parts of Scotland. This is challenging for local authorities as they look to manage their limited resources.

But we also know that our hospitality sector is a large tax contributor, with some hotels dealing with large business rate rises as a result of their success. There is a need to achieve a balance between national principles and priorities and local flexibility and circumstances should any levy be introduced to allay concerns about the potential impact.

Our submission therefore makes the following key points:

  • A levy will not be appropriate or required in every local authority or in every place.
  • Legislation should set out national principles and a national framework within which local authorities are granted flexibility to design a levy system which reflects their local socio-economic conditions and priorities.
  • A levy should be based on a flat rate per room per night.
  • Local authorities should have the flexibility to set the rate in their area, but the legislation should enshrine a national upper limit.
  • Local authorities who decide to progress with a levy, should be required to establish a local Transient Visitor Levy Forum of key local stakeholders to inform the design and implementation of the new system and to inform how revenue is spent.
  • Revenue should be ring-fenced for investment in local infrastructure and services capacity to support and manage sustainable tourism.