Highland business leaders have joined forces to urge a rethink of the proposed tourist tax they say threatens to harm local companies.
Cairngorm, Caithness, Inverness and Lochaber chambers of commerce say the proposed visitor levy scheme in the Highlands could have “significant negative consequences for tourism”.
They claim the move could lead to businesses deciding to close their doors or shorten their season.
Highland Council is consulting businesses and individuals on a 5% visitor levy which it expects to generate over £10 million a year for the region. That consultation closes on February 7.
New legislation means local councils can impose an added fee for stays in hotels and bed and breakfasts, self-catering accommodation and campsites and caravan parks from 2026.
Money raised from the levy would go towards improving infrastructure across the region, such as roads.
How will tourist tax cash be spent?
In a joint statement, the chambers expressed concern over the lack of clarity on how money raised would be used.
They also called for meaningful dialogue before Highland Council presses ahead with the tourist tax.
It states: “Collectively we believe that implementing a visitor levy at this time would have significant negative consequences for tourism in the Highlands, which is already facing numerous challenges.
“The Highland tourism industry is vital to the region’s economy and provides significant employment opportunities.
“We understand that change is needed for the tourism industry and are very happy to explore all options with relevant stakeholders.
“We believe that a well-considered and carefully implemented approach to tourism development is crucial for the long-term success of the Highlands.
“Therefore, we urge caution and a thorough review of the proposed visitor levy before any decisions are made.”
Highland Council has been approached for comment.
What are the Highland chambers specific concerns?
The four Highland chambers of commerce warn the proposed tourist tax could undermine the industry.
They say:
- Economic impact: The current economic climate is fragile. A visitor levy would further increase the cost of tourism, potentially deterring visitors and harming businesses that rely on tourism for their livelihoods.
- Administrative burden: The proposed percentage-based charging model is complex and costly to administer for businesses. A simpler, fixed-fee model would be more manageable and equitable.
- Funding uncertainty: There is a lack of clarity on how the revenue generated from the levy will be used. We urge that funds be specifically and transparently allocated to enhancing the visitor experience and supporting sustainable tourism development.
- Competitive disadvantage: The Highlands already face challenges in attracting visitors due to factors like travel costs and remoteness. A visitor levy would further increase the cost of visiting the region, making us less competitive.
- Inadequate consultation: Many businesses and residents in the Highlands remain unaware of the implications of the visitor levy and have not been adequately consulted on its potential impact.
- Operating costs: With the UK’s VAT rate among the highest in Europe, applying VAT to this levy effectively creates a double tax, driving up prices for consumers. For numerous small businesses, this added burden could push them over the VAT threshold. This scenario risks leading to business closures or shorter operating seasons, further weakening the sector’s stability.
Scottish Tourism Alliance (STA) has also expressed deep concerns about the introduction of a visitor levy scheme in the Highlands.
8.4m visitors to Highlands in 2023
Tourism in the region has surged in popularity in recent years, bringing significant economic benefits, but also placing a strain on local infrastructure.
According to the Highland Council, visitor numbers reached 8.4 million in 2023.
It said the overall economic impact on the Highland region for the year was £2.1 billion.
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