Visitors to Dunfermline could be made to pay a ‘tourist tax’ as part of Fife Council plans, in a move that one tourism expert says could affect tourism to the area.
It comes after the Scottish Government passed legislation which allows local authorities to charge visitors for overnight stays in hotels and B&Bs.
Edinburgh City Council recently became the first local authority to vote in favour of introducing a levy, with a proposed rate of five per cent per night.
Fife Council has confirmed that it may bring in the levy, with critics naming the rising cost of living, and an opportunity to capitalise on Edinburgh's already-high prices as being key reasons why it could hit tourism in Fife.
Tourism is a significant industry in the Kingdom, with visitors making an overall contribution of £338 million in 2023 - 81 per cent of all overnight stays were made by repeat visitors.
Dunfermline alone welcomed an impressive 656,660 visitors, generating £124.1m in economic value.
Green Party MSP for Mid Scotland and Fife, Mark Ruskell, said: “I think the council should get on with it now. It doesn’t make sense for Fife to not have a visitor levy when there’s one just across the Forth.
“Although it may not raise the same level of revenue that you’d expect to see in Edinburgh, you could still really make use of it, whether that’s by enhancing visitor attractions, investing in facilities in Fife, or supporting the cultural creative sector.
“International experience is that this doesn’t turn people away. Many holidaymakers are very used to paying these types of levies, and in Europe it’s just standard. If you invest in facilities, people will come back again and again.”
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SNP councillor for Dunfermline Central, Derek Glen, said: “We would very much like to see it done, and we think it’s a very good way of raising additional revenue.
“The Scottish Government approach leaves room for nuance. It recognises that not one size fits all, but I think in Fife we absolutely can and should be implementing this because tourism is a huge part of our success right across the county.
“Locals already support all our facilities through the council tax, and this would ensure that visitors were making a contribution as well.”
But the Scottish Tourism Alliance has raised concerns about the levy.
Chief executive Marc Crothall said: “We’re already an expensive country. We’re seeing a shrinkage in domestic visitors, so fewer people travelling from within the UK.
“A reason for that is the cost of living and prices already being quite high. There’s a problem with adding an extra cost on top of that.
“It's a very sensitive situation and it can’t be taken for granted that people will just be happy paying an extra couple of quid, because it’s not that, it’s quite a bit more.
"You look at hotels with high rates and if you add an extra five per cent, that’s also money that could be spent in pubs and restaurants.
“It could actually work the other way around and be advantageous to areas where the tax doesn’t apply.
"If there’s no tax in Dunfermline, people might choose to stay there and go into Edinburgh. Then Dunfermline could benefit from secondary spending in attractions and the High Street.”
Dunfermline’s proximity to the capital makes it an attractive base for tourists who may wish to stay somewhere cheaper and travel into Edinburgh.
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Cllr Glen said: “I would have thought that for the most part, if people are determined to stay in Edinburgh they will stay there no matter the cost, but if they are that price sensitive they would already be looking for accommodation outside of Edinburgh.
“If you’re talking about a room that’s £100 for a night, you’d be paying about five or six quid, which is around what it would cost for a train. I don’t think it makes sense that it would put people off.”
People of all political persuasions agree that there must be sufficient community engagement before a levy can be introduced, and that the process must not be rushed.
The City of Dunfermline area committee convener and Liberal Democrat councillor, James Calder, said: “It’s certainly an idea that the Liberal Democrat group are considering.
"Before we go ahead there needs to be discussion with local businesses about how it might affect them, but also how we would utilise the funds that would be taken from this.
"It needs to have a beneficial impact for the people of Fife, including those in areas where there are high levels of tourism.
“There needs to be a consideration of how the funding from this can be used to mitigate some of the impacts of tourism, but also to support tourism development as well."
A bone of contention around Edinburgh’s decision to introduce a levy is that it would apply to everybody staying in overnight accommodation, not just international tourists.
In 2023, 65 per cent of overnight stays in Fife were made by domestic visitors who reside in the UK.
Conservative councillor Kathleen Leslie said: “Say somebody from Dunfermline was to have an anniversary event up in St Andrews, I’m not sure that it would be right that they pay the levy because it’s Fife residents spending money in Fife.
“For our group it’s all about the consultation. It can’t just be box ticking. I see it far too often with this council when they say we’re going to consult but they already know beforehand what the outcome is going to be.
“I just get fed up of hearing about consultation that is just completely flaky.
“My question would be why are we doing this? I would say because local authorities once again are not being funded properly so this may bring in some additional income, but we shouldn’t be scrabbling around like this looking for that.”
Fife Council face a £16m budget gap in 2025-26 with councillors warned that further challenges could lie ahead.
Council leader David Ross, of the Labour Party, said: “These things like the tourist tax and the workplace parking levy that we’re getting powers for are in themselves marginal. They’re no substitute for a proper core grant settlement.
“We’re continually making the point to government that they can’t just buy us off by saying ‘you’ve got these powers.’
“It’s something that we are looking at, but with no immediate plan to implement. It will take time, and if we were to do it, it wouldn’t be next year.
“We were thinking that if it was a set amount like in some European countries, say one or two pounds a night or something like that, that’s probably more acceptable than the rigmarole around a percentage.”
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