Why Edinburgh Wants a Tourist Tax

A trip to Edinburgh, Scotland, could soon get a little more expensive.

This month, Scotland’s capital became the first city in the U.K. to agree to a so-called tourist tax. Likely to be introduced next year, the tax will add a £2 ($2.60) surcharge per room, per night, for the first week of every stay in Edinburgh’s short-term accommodations (excluding campsites). The levy, which will still require already agreed-upon legislation in the Scottish parliament, could raise roughly £14.6 million ($18.8 million) a year, all of which could be allocated specifically for spending on issues directly related to tourism.

The charge arrives at an opportune moment. Edinburgh is unquestionably one of the most beautiful and dramatically-sited cities in Northern Europe, but right now it can feel as if it’s at risk of bursting at the seams. Tourist numbers to the city of 500,000 residents have grown beyond 4.5 million visitors annually (including half a million Americans). In peak seasons, Edinburgh is finding its sidewalks jammed and its public transit clogged, while short-stay accommodations nibble away at the rental pool available to its growing population. Charging people extra to stay in the city won’t cure these issues, but it could offer some respite.

If successful, it could prove a template for cities across Britain. As things stand, Northeast Scotland’s Aberdeen and the English cities of Bath and Oxford are already eyeing similar moves, hungry to gain some public funds back from an industry that places strain on both public and private space. It’s possible that other major tourist destinations, including London, could introduce a charge that’s already in place in tourist hotspots like Barcelona and Amsterdam. Indeed, if some cities in Britain start taxing overnight stays, it seems likely that other towns won’t be able to resist the temptation to do the same.

It’s not hard to see why Edinburgh’s visitor numbers have boomed. With grand sandstone buildings stacked across a raw-looking topography of rocky crags and steep valleys, the city makes the rest of the urban British isles look tame by comparison. Resembling a cold version of Athens, Edinburgh’s neoclassical buildings, garden squares and sweeping views are unforgettable, as is the smell of malt wafting down the streets around the city’s breweries.  

Central Edinburgh as seen from the city’s Salisbury Crags. (Peter Cziborra/Reuters)

The city, however, is not designed for crowds. In high tourist season, footfall in busy areas can double, while the city’s topography tends to force traffic through a few bottlenecks. After years of nationally-imposed austerity, Edinburgh’s infrastructure isn’t in great shape; basic services like street lighting and trash collection are functional, but getting threadbare, while sidewalks and even some historic buildings are somewhat battered. Locals and visitors alike are increasingly fighting for the same apartments. On top of all this, the city has to pump money into inspecting and enforcing standards for the tourist industry, but doesn’t currently have a way to source any direct funding for this from the industry itself.

The city has certainly been making efforts to improve its infrastructure. It is, for example, on the cusp of approving an extension to its streetcar line down to the port. Too often, limited funds have led to superficial responses: proper renovations of buildings on major streets get denied, but a scattering of trees in tubs get the green light. The modest revenue from a tourist tax couldn’t turn this trend around on its own, but it could at least provide ring-fenced funding for street improvement and lessen the sense that the tourist industry is robbing the golden goose of its eggs.

The hospitality industry has predictably been skeptical, although not universally hostile. Many businesses seem cautiously in favor, although one company whose profits go to a surgery charity has preposterously implied that being forced to levy the charge will in some roundabout way lead to deaths. Polling nonetheless suggests that the charge would deter only a very small number of visitors, even though it will indeed push up the average price of a stay.

In a country where the economy is sluggish and a parsimonious approach to public spending is enforced at the national level, tourism is one of the few industries that is growing and buoyant. If potential visitors are undeterred, it’s hard to fault efforts to channel a little more of the tourism industry’s earnings back into improving the places whose charms it lives off.

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