As Scotland prepares for the rollout of visitor levies across its local authorities, debate continues to grow over the balance between generating local revenue and protecting the country’s tourism industry.
Under the Visitor Levy (Scotland) Act 2024, councils now have the power to charge a levy on overnight stays in accommodation such as hotels, B&Bs, hostels, self-catering lets, and campsites. Both leisure and business visitors — including Scottish residents — will be required to pay the charge.
The measure is designed to ensure that funds raised are reinvested into local services and facilities used by visitors, helping to maintain and improve Scotland’s most popular destinations. However, many within the hospitality sector have voiced concerns that the tax could place additional strain on an industry already under pressure from rising costs and a slower post-pandemic recovery.
Pamela Gilmour, counsel in Dentons’ Edinburgh-based banking and finance practice, noted that while the levy aims to deliver community benefits, it also presents challenges. “Many smaller operators are still grappling with inflation, staffing issues and reduced consumer spending. There’s a real concern that an added cost for visitors could impact both demand and profitability,” she said.
The first visitor levy is due to launch in Edinburgh in July 2026, applying a 5% charge on overnight stays for up to five nights. The city’s high level of international tourism is expected to make the policy sustainable. Both Glasgow and Aberdeen have announced plans to follow with 5% and 7% levies, respectively, from 2027, while other local authorities — including Highland, Argyll and Bute, Stirling and West Dunbartonshire — are still consulting the public on similar proposals.
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Some areas, such as Orkney, have ruled out overnight taxes altogether, exploring alternative visitor levies instead. In rural regions, particularly in the Highlands, residents have raised concerns about the potential impact on those travelling locally for family visits or work.
Experts warn that local authorities should avoid over-reliance on visitor levies as a revenue stream, noting that any fall in accommodation prices could reduce tax income. Nonetheless, Scotland’s enduring appeal to both domestic and international travellers provides optimism that the tourism sector can adapt successfully.
If managed carefully, analysts suggest the policy could ultimately enhance Scotland’s visitor experience, support investment, and create new jobs — ensuring the country remains one of Europe’s most attractive destinations.
