Tourist tax plans in Scotland threaten to sow confusion, warns Expedia

Picture: Jeff J Mitchell/Getty Images
Picture: Jeff J Mitchell/Getty Images

Tourist tax plans in Scotland threaten to sow confusion and act as a drag on the sector, the online travel giant Expedia has warned.

In evidence submitted to the Scottish Parliament, the company said the travel and tourism sector is already more taxed and regulated in Scotland than in the rest of the UK.

It added: "Now they face a further, potentially significant tax that will make their offering less competitive to travellers when compared to other destinations in the UK and in Europe.”

It comes after the Scottish Government put forward legislation which, if passed, will allow local authorities to impose a visitor levy.

Under the terms of the Visitor Levy (Scotland) Bill, charges would apply to those staying in hotels, hostels, bed and breakfasts and self-catering accommodation, as well as on campsites and at caravan parks and boat moorings or berthings. The money raised would then be reinvested locally in facilities or services used by tourists.

MSPs on the Local Government, Housing and Planning Committee issued a call for views on the legislation over the summer, attracting more than 780 responses.

In its submission, Expedia said: "We are concerned that the Visitor Levy Bill introduced to the Scottish Parliament threatens to act as a drag on Scottish tourism. While we do not believe tourism taxes in all cases harm travel, the complex patchwork of different rates that would be created across Scotland as a result of this Bill is likely to cause confusion for travellers and tourism businesses as well as being overly complex for the sector to administer."

It said the travel and tourism sector was “greatly impacted” by the pandemic and is not projected to recover until at least 2025. “With the financial impact of the lockdowns still being felt by the industry, and now a cost-of-living crisis taking hold, another burdensome tax risks disincentivising travellers coming to Scotland and will raise costs for businesses in the sector because of the greater administrative burden,” the firm said.

Elsewhere, it argued the lack of a clear national framework and rate for the tax “will create complexity and confusion”. It added: “Our concern is that the Scottish model presented to Parliament will result in a patchwork of different rates and exemptions, across geographic areas that are inconsistently defined. This will be confusing for travellers and accommodation providers, hard to administer and difficult to enforce.”

Expedia made a number of recommendations, including delaying the implementation of the tax until the Scottish tourism sector “has demonstrably recovered” from the pandemic. It also said the Scottish Government should centralise the tax, developing a national framework that sets a single rate, applicable to all areas.

Expedia describes itself as one of the world’s largest online travel agencies, owning and operating more than 200 travel booking sites across 75 countries.

A Scottish Government spokesman said: "The Visitor Levy Bill aims to increase funding for local visitor facilities by allowing councils to apply a levy on overnight stays if they wish to do so. The Scottish Government is working to ensure businesses play a central role in developing this legislation, having asked VisitScotland to bring together figures from industry and local government to produce guidance on how this new discretionary power is used.

"The legislation requires local authorities to consult local businesses and communities before introducing a levy. They would also be required to provide a lead in time to allow businesses to put systems in place to collect the levy, helping to alleviate any administrative burden, and to publish assessments of how the measures are affecting local businesses."