By Roland Smyth, head of Scottish hotels & leisure group at law firm CMS

IMAGINE this greeting awaiting visitors arriving in Edinburgh or Glasgow: “Welcome to Scotland. We’re grateful you’ve chosen to visit our beautiful country to spend your money and support our economy. If you would now pay this surcharge, we’ll let you get on with your holiday.” As hostile as it sounds, that could be the very message we would be sending to the rest of the world if calls to impose a so-called tourist tax in popular visitor destinations such as Edinburgh and Skye ever come to fruition.

International tourists visiting Scotland already face levels of VAT and air passenger duty that are among the highest in the world, and the current Scottish Government position on this matter seems clear. Last month Holyrood’s Culture and Tourism Minister Fiona Hyslop told the British Hospitality Association she had “no plans” to impose any additional tourism-related tax and would only ever consider such a move with the involvement of the hospitality industry to ensure its long-term interests were fully recognised.

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There are, however, a number of figures, including John Stevenson of Unison and former Edinburgh City Council leader Donald Anderson, arguing that an additional charge on hotel rooms is essential to pay for the public infrastructure needed to support tourism. Similar views have been expressed in rural areas, including by Maxine Smith, leader of the SNP group on Highland Council.

The proponents claim that adding a few extra pounds to a hotel bill will not affect visitor numbers. That view, however, fails to recognise the detrimental message that imposing a blanket tax would convey about Scotland as a welcoming destination.

An in-depth study by PwC for the European Commission, which was published at the end of last year, provides some strong counter arguments to taxing tourists. While it does accept the tough balancing act facing governing authorities, which must raise revenue to support tourism on the one hand and maintain competitiveness on the other, it warns of the potential impact of imposing a blanket surcharge on visitors. It highlights the increasing level of consumer awareness and price sensitivity which is putting pressure on competing tourism destinations.

Another study by the American Economics Group raised concerns about how a hotel room tax can also divert tourism expenditure from other parts of the industry, such as restaurants or entertainment providers, with a knock-on impact on the wider economy. PwC’s report looked in particular at the accommodation sector in the UK. It suggested the introduction of a three per cent room charge could result in more than 23,000 lost jobs and make a £1.18bn dent in Britain’s GDP.

In a competitive global market, a successful tourism industry is vital for Scotland’s economy. Visitor spending currently generates around £12bn of economic activity, contributing around £6bn to GDP and accounts for over 200,000 jobs. There’s no doubt we need to maintain public sector funding to support tourism and follow Amsterdam’s lead in developing creative solutions that help protect local residents’ quality of life by enticing visitors to explore areas further afield from the usual tourist hotspots. But imposing a tax on those who choose to come here seems the wrong solution.

Given its growing economic contribution, both public bodies as well as private sector operators need to look at alternative means of providing the infrastructure required to support the tourism sector’s needs. The message greeting visitors w needs to make it clear they are warmly welcomed and that Scotland is truly open for business.