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The Visitor Levy: How it works in other cities

As local authorities across Scotland consider implementing a visitor levy, we wanted to highlight the different approaches other cities across Europe have taken.

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The Scots love a holiday, with around 70 percent of Scotland’s population going on at least one holiday in 2022. Often when jetting off, whether to get some Vitamin D on a Greek island or have a city break in popular locations, such as Barcelona or Paris, it is not unusual to see a small charge added to your hotel bill at the end of your stay. This tourist tax charge or ‘transient visitor levy’ is common on overnight stays in many European cities. However, Scotland looks set to be the newest country set to implement the visitor levy in its cities. 

In 2021, Glasgow topped the esteemed Condé Nast Traveller’s list of the best UK cities to visit and subsequently, the popular destination attracted 2.65 million visitors in 2022 who spent £953 million at local attractions. Glasgow has been described as a gateway to Scotland’s outdoors being a short distance from castles, lochs, beaches and hills when using public transport.

Glasgow has many great other attributes. It won the title of the world’s friendliest city in 2022 and hosts many award-winning attractions, such as galleries and museums including Kelvingrove Art Gallery and Museum, The Burrell Collection, and the Glasgow Science Centre. Additionally, the city has great nightlife with many restaurants, bars and music venues, such as the iconic Barrowland Ballroom.

The new visitor levy bill going through the Scottish Parliament aims to allow a tax to be charged on overnight stays in some types of accommodation. The bill would allow local authorities to decide whether to implement a charge and if so, what the level of the charge should be. This fee or tax would be paid to the local authorities every time a visitor has an overnight stay in accommodation, such as a hotel, bed & breakfast or holiday cottage.

Although a tourist tax has become familiar when holidaying abroad, concerns have been voiced over the decline in visitors a tax may have if implemented in Scottish cities. Despite this, Glasgow City Council had unanimously approved a Transient Visitor Levy, with Bailie Dr Baker stating that the Glasgow City Council appreciated: 

‘… the contribution of tourism to our local economy and notes that major city tourism destinations such as Vancouver, New York and Venice, as well as many other cities in the United States and Europe, place a small levy on visitors. Glasgow notes the potential of a relatively small levy of around £1-2 per night stayed to generate at least £2 – 4 million per annum and that this scale of levy is unlikely to discourage visitors or affect the hotel trade.’

So, if the charge is so common, what do other cities do with the tax? Typically the tax is directed back into the tourism sector to: improve its promotion; for the sector’s development; improving the infrastructure and services in place; and public services which affect the destination. The tax is higher in more popular destinations. 

We took a look at how other cities have implemented the vistor levy

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Amsterdam, The Netherlands

With around 20 million annual visitors, Amsterdam currently hosts the highest tourist tax in Europe at 7 percent of accommodation price plus a flat rate of 3 euros (approximately £2.56). In 2023, the tourist tax collected in Amsterdam totalled around 7 million euros and was used by the local authorities to improve and maintain its public transport network. But in 2024, the Dutch capital will be increasing the charge from 7 percent to 12.5 percent and this will affect overnight guests and those visiting on cruise ships. This price increase is hoped to be invested in the city and local areas to combat the rowdy disturbances generated by tourists and preserve the city’s charm. Already city officials have implemented earlier closing times for bars and clubs and banned smoking cannabis on the street in the city’s famous red-light district.

Manchester, England

Last year, Manchester became the first UK city to introduce a tourist tax or City Visitor Charge. Since 1 April 2023, visitors staying overnight in hotels or serviced apartments in the city centre have been charged £1 for every night they stay. However, guests staying in Airbnb, small hotels, bed & breakfasts or hostels are exempt. Additionally, those who are travelling for business are exempt if they can prove the purpose of their visit. 

It is hoped by the Manchester Accommodation Business Improvement District (BID), which is managing the initiative, that around £3 million will be raised annually and that the money collected through the tax will help the tourist economy post-pandemic. The money will be spent on revitalising tourist initiatives, such as festivals, conferences and also street cleaning.

Barcelona, Spain

Barcelona is Spain’s most visited city with around 32 million annual visitors and faces problems created by overtourism. The majority of visitors to the city who come off cruise ships are day visitors and with limited time and a radius, visitors often overcrowd popular areas, such as La Rambla and the Sagrada Familia. The rise in visitor numbers in concentrated time frames has led to a lower quality of life for residents as local shops are replaced with souvenir shops. So, the local government sought to combat this through accommodation.

Since 2012, the city has charged visitors a small fee on top of the region-wide tourist tax. The price of this city surcharge varies depending on the type of accommodation visitors stay in. In 2023, the fee rose from €1.75 to €2.75, however, the fee is to rise again on 1 April 2024, to a charge of €3.25. This fee is charged to overnight guests and cruise passengers spending more than 12 hours in the city and is estimated to bring as much as €100 million to the city in 2024. These proceeds will be used for a range of local projects such as improving roads, bus services, escalators and public restrooms at beaches. Most recently the city hall has launched a plan to use €100 million from its tourist tax to install solar panel-powered air conditioning in 170 state-owned schools by 2029. The hope is that this would have positive long-term benefits for the city and act as a blueprint for other cities dealing with over-tourism and climate change. 

Prague, Czech Republic

The Czech Republic’s capital city is a city full of spectacular architecture and a long history. The city welcomed over 7 million overnight guests in 2023. However, these visitor numbers are still not as high as pre-COVID, when the city saw almost 8 million tourists in 2018, which outnumbered local residents 6:1. The main problem in Prague is the volume of tourists visiting only for a short period and not spending enough per head. The city needed to attract more congress tourism which would attract people to the city for meetings, exhibitions or business events. In 2022, the Prague Councillors approved an increase to the city’s tourist tax from CZK 21 to CZK 50 (approx. equal to £1.60) charged on each overnight stay.  

Roman Muška, Managing Director of the Prague Convention Bureau stated that the fee increase would: “not only lead to an increase in future investments in marketing and promotion of Prague abroad but will also support the holding of important business or cultural events that will attract cultured visitors. As a key message, we perceive the fact that the funds raised will be intended to fulfil the long-term vision of cultivated and sustainable tourism and the promise to significantly support the image of Prague as a destination suitable for congresses and conferences.”

After the increase, CZK 448 million (over £15million) was collected through the taxes. Within Czech, Prague is the only municipality that reinvests half of the revenue from their tourist tax into tourism development, such as congress tourism initiatives and marketing, while the other half develops infrastructure and the upkeep of public spaces.

Paris, France

France’s capital is one of the world’s most visited cities and topped the Euromonitor’s Top 100 City Destinations Index in 2023. Paris saw over 40 million visitors in 2023 and with the Olympic Games being held in the city this year it is estimated there will be 15 million guests there for that fortnight alone. In Paris, the tourist tax varies depending on the standard and quality of accommodation. The rate of tourist tax ranged from €0.65 to €8,13 however, on 1 January 2024, Paris City Hall increased the tax by 200 percent

This means that visitors staying in a 3-star hotel will now pay €5.20 per person per night and guests staying in 5-star hotels will be charged €10.73 per person per night. This sharp increase is part of a bid to support and improve public transport in anticipation of when it will be transporting a greater volume of people for the Paris 2024 Summer Olympics. 

So what does that mean for Glasgow, Scotland?

It would be hoped that similar projects which would support local services, improve the city’s capacity to host its growing number of visitors and improvements to Glasgow’s neighbourhoods could be funded by a tourist tax if implemented by the city council. Upon contacting the Glasgow City Council, the Scottish Beacon was told that, at the moment, there is funding in the Glasgow City Council budget to work up business cases for things such as a visitor levy, however, there is currently no specific proposal in place.

The Visitor Levy (Scotland) Bill is currently in Stage 3, final changes and vote. This means that MSPs can still propose amendments to the bill and then they will debate and vote on whether to pass it.