Edinburgh Council backs tourist tax plans

The City of Edinburgh Council has voted in favour of a controversial plan to implement a proposed £2 tourist tax on the city.

The plans still require legislation from the Scottish government, with a final proposed to be submitted to the national legislature following the vote today. The news comes after the Scottish government included an introduction for a tourist tax into its budget last week.

The decision has been welcomed by Edinburgh Chamber of Commerce  who said they found “broad support” for the levy.

Its CEO, Liz McAreavey, told BBC News: “After consulting our members, we found broad support for the principle of a transient visitor levy, support which increases further if funds were ring-fenced and re-invested entirely in the city’s infrastructure.

“What we require now is some more detailed information from City of Edinburgh Council as to exactly what they propose to do with the funds raised via a TVL.”

However Willie Macleod, UKHospitality’s executive director for Scotland, said he is “extremely disappointed” that the City of Edinburgh Council has voted in favour.

He said: “During the debate, Cllr McVey stated that consultation was a critical part of their process. Our members in the city would disagree, they do not support the introduction of a tourist tax and their opinions have been ignored.

“It has been suggested that a tax will raise £11m but economic impact modelling shows that it would cost the city £94m, making it the highest taxed city to visit in Europe.  In these days of austerity, it seems bizarre that councillors would jeopardise losing millions of pounds of potential revenue from not only international visitors but also “staycationers” from Scotland and the rest of the UK.

“Furthermore, the City of Edinburgh Council vote comes despite no legislation having yet been passed by the Scottish Parliament and the Scottish Government has yet to initiate its promised consultation on any such legislation.”

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UK Hospitality disputes Edinburgh City Council tourist tax claims

UK Hospitality (UKH) has said it is “concerned” at the assertion made by City of Edinburgh Council that 51% of accommodation providers in the city are supportive of a tourist tax or transient visitor levy (TVL).  

It comes after the council revealed it received over 2,500 responses to its eight-week public consultation held at the end of 2018 which found 85% expressed strong support for the introduction of TVL or ‘tourist tax’ in the city. The figure are said to include a majority of Edinburgh-based businesses and accommodation providers.

The proposal, which suggests a charge of either 2% or £2 per room per night, chargeable all year round on all forms of accommodation including short-term lets, could raise between £11.6m and £14.6m per year.

However the director of the hospitality association Willie MacLeod has called those claims into question. He said UKH is “in no doubt” that the vast majority of accommodation businesses in the city (including hotels, serviced apartments, B&B’s, hostels and self-catering properties) are opposed to a TVL.

MacLeod said this is clear from among the independent operators and larger chains in UKH membership and from the membership of the Edinburgh Hotels Association.

He said: “The council fails to make clear that the survey response refers to 87 of the 170 accommodation businesses that responded to the council’s survey and representing, respectively, 4% and 8% of the city’s accommodation businesses. It would be helpful if the council made clear which types of accommodation businesses have responded.

“The Scottish government is in the midst of conducting a national discussion on TVL and has been clear that is has no plans for the introduction of any such tax on consumers which will be payable by residents of Scotland as well as by visitors to the country.”

He continued: “Instead of pushing ahead with its proposals  for the introduction and administration of a TVL, the City of Edinburgh Council would do well to await the outcome of the government’s deliberations on the principle of such a tax which, if to be taken forward, will require clarification of many unanswered questions, primary legislation, and formal consultation which will, hopefully, take more account of the views of an industry which understands its consumers than has the City Council.”

Hotel Owner has reached out to City of Edinburgh Council and is awaiting comment.

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TUI’s hotel arm drives growth

TUI, the German travel and tourism company has delivered double-digit earnings growth in financial year 2018 – for the fourth consecutive year – driven by the success of its hotel arm.

During the 52-week period ending 30 September 2018 the group’s transformation into a developer, investor and operator of hotels and cruise ships has helped the group see profits climb 10.9% to €1.22bn (£1.09bn). The group also saw its turnover jump 6.3% to 19.7bn (£17.7bn).

The group said that the transformation, initiated in 2014, has helped TUI’s business to deliver “considerably higher margins” and is less seasonal, reducing its “dependence on the summer months”. It said its TUI’s Hotels & Resorts, Cruises and Destination Experiences segments now account for 70% of the group’s underlying EBITA.

TUI Hotels & Resorts opened 16 new hotels in 2018 and now operates 380 hotels and resorts globally. It reported an increase of 19% in underlying EBITA during the period totalling 425.7m (£382.8m).

TUI CEO Fritz Joussen said: “We are investing, we are growing with TUI’s high-margin products and services and our businesses are increasingly scaling. Today, our own holiday experiences content account for more than 70% of our earnings: hotels, cruises, excursions and destination activities. This enables us to clearly differentiate ourselves from the competition.

“With more than 20 million customers, use of state-of-the-art IT and intelligent customer systems, we have considerable potential for new business, turnover and earnings. We will continue our successful transformation: The next step will transform TUI into a digital and platform organisation.”

For financial year 2019, the TUI executive board said it expects to deliver growth in underlying earnings of at least 10% in a challenging market environment.

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A recent survey from hotel solutions provider HRS has found that the demand for innovative technology in hotels is on the rise


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