A new Ross Bandstand? Tourist tax has got Edinburgh thinking big

City leader sees levy as chance to fund 'exciting' major projects

The International Festival’s Opening Fanfare at the Ross Bandstand. Pic: Edinburgh International Festival

It has been a long time since Edinburgh’s council leader Cammy Day has been able to use the ‘E’ word with any genuine conviction and enthusiasm. 

No, not ‘election’ - as a life-long Labour Party man, he has been looking forward to the prospect of a General Election for some time now - but ‘exciting’.

Since he took on the role almost two years ago, the job has largely been plenty of political grind, deal-making to support his minority administration, managing cuts to an already strained budget.

What has put a bounce in his step today is the possibilities presented by the introduction of the so-called tourist tax.

In a city which relies for so much of its prosperity on the tourist pound - and dollar, euro and yuan - the introduction of a visitor levy was never going to be all plain sailing.

Popular with the public - who see it as literal pay back for the inevitable disruption caused by the city welcoming more than four million visitors a year - it is still the subject of some angst within the tourism industry itself.

‘Yes, most other cities have a visitor levy, but they don’t have 20% VAT.’ The concern is that in a competitive international tourism market Edinburgh will be seen as offering less value for money than many of its European neighbours.  

That argument, however, has been settled for now. The introduction of a visitor levy has been agreed, barring some crucial details, and is expected to be introduced early in 2026.

‘We can start doing exciting things’

The debate has moved on to how the money it raises might be best spent. With a levy of 4-5% on accommodation under discussion, we’re talking substantial sums, up to £150 million over a five-year cycle.  

But Day and his City Chambers colleagues are thinking bigger.

“That (a 4-5% levy) could generate somewhere between £20 to £30 million for the city annually. That allows us to consider borrowing again, starting doing exciting things in the city. We'll work with the sector and with the city to make sure that it's spent to benefit the whole city.”

With favourable lending rates for local authorities, the council could secure funds of £50m, or even £100m, for a major infrastructure project by committing a significant portion of the annual visitor levy income.

That suddenly opens the door to a range of exciting projects which have seemed distant or impossible in recent years.