Edinburgh Split Over 'Bed Tax'

CHARGING EDINBURGH tourists more on their hotel bills could result in an extra £38 million being spent by visitors in the city every year, according to new research.

The finding forms the centrepiece of a study to be presented to members of the Edinburgh Tourism Action Group (Etag) in April.

It suggests that for every £1 spent on marketing and improving tourist facilities in Edinburgh, £12 will be generated in extra spending.

The research, detailed in the Sunday Herald, explores the impact a hotel levy - where an additional charge, or "bed tax", is added to bills - would have on the city.

The study estimates £3.2m could be raised every year, resulting in £38m to be reinvested. The research claims tourists would not mind paying the extra fee, provided some of the money raised was also spent on environment, heritage, transport and tourist information projects, as well as extra marketing of Edinburgh across the world.

The idea of a hotel levy was first raised by Etag last year, where it was met with fierce opposition from hoteliers. A survey of 500 Edinburgh hotels, by accountancy firm Johnston Carmichael, last April found 94 per cent of them thought a bed tax would harm their business.

However, Etag has persisted with the idea, which it stressed would be a levy and not a tax, by preparing new research and, at the group`s annual conference in Murrayfield last week, the idea was raised again.

A straw poll, carried out towards the end of the day, showed only five people in a room of at least 100 of Edinburgh`s industry figures were now completely opposed to the plan.

Simon Williams, Etag`s hotel levy project champion, said the idea was being "increasingly talked about" both inside Edinburgh`s tourist industry and by those in other top Scottish destinations, such as St Andrews or Aviemore.

Williams said that Etag - which has more than 150 members - they would not take a formal view until it had all had a chance to discuss the new research in April.

He said: "The principle challenge is to get some businesses to understand that while this is a tax/levy on the visitor, collected by hotels for the destination, it is not a tax on the business. Visitors are the beneficiary as well as the destination."

He said money raised by a hotel levy would be controlled and spent by private sector groups and not by Edinburgh council.

Further details - such as what private sector body would spend the money - would be worked out only if most Etag members supported the idea.

Paul Vallee, executive vice-president of Tourism Vancouver, said the Canadian city uses money from a levy to finance international marketing campaigns, and added that at least 200 other cities in North America operated similar schemes.

"The charge is so small most customers don`t even notice. Only a handful of them make mention of it in any year," he said.

But Daniel Pereira, manager of the five-star Scotsman and Glasshouse hotels in Edinburgh, was still against the idea.

He said: "We still feel it would have a damaging effect on the industry and the charge would still be a tax. We can`t see how it would be a positive thing."