Investing a visitor levy for Edinburgh
The underlying rationale for introducing a visitor levy is that visitors who pay to stay in the city use public spaces and services should contribute to managing the impact of a successful tourism economy.
The Act says that funds raised must be reinvested in local facilities and services substantially used by business and leisure visitors.
The levy is expected to raise £45-50 million a year by 2028/29. The money generated by the scheme will be reinvested directly into initiatives that benefit residents and enhance visitor experiences.
After administration and contingency costs, a fixed amount will be assigned to
- housing and tourism mitigation (£5 million annually)
- participatory budgeting (£2m over 3 years)
- reimbursement of 2% of collected funds to accommodation providers, to off-set the administrative cost incurred from collecting the levy
Remaining funds will then be split across three investment streams
- city operations and infrastructure (55%)
- culture, heritage and events (35%)
- destination management (10%).
These investment streams will be developed by officers and the Visitor Levy Forum will be consulted on the proposals. The proposals will have final approval from relevant Council committees.
Deciding on where the levy funds are invested
The Act stipulates that a Visitor Levy Forum should be set up. This group must include a balance of
- tourist organisations
- businesses engaged in tourism
- representatives of communities.
This is an advisory group to help inform and shape how the levy will be invested and monitored.
Reporting on how we invest the levy
If we introduce a visitor levy, we will need to report to Scottish Government
- on the amount we collect
- how we will use the net proceeds, that is the amount collected minus costs or expenses of operating the levy
- demonstrate that we are delivering on how we said we would invest proceeds from the levy.