Scotland’s First Flat-Rate Visitor Levy Plan Highlights Unanswered Questions FSB Say

Argyll & Bute Council is being urged to address significant unanswered questions on its proposals for a £5 flat-rate visitor levy amid fears over the potential impact on small accommodation providers.

The Federation of Small Businesses (FSB) Scotland said the council’s proposals – including the first flat-rate charge in Scotland – raised concerns around fairness, practicalities for small businesses, and the possible impact on the area’s vital visitor economy.

In its response to the local authority’s consultation on its proposals, FSB said a visitor levy has the potential to bring benefits to the area’s tourism economy if designed properly.

However, it warned that while the flat-rate charge might seem simple to calculate, it could prove as complex to administer as the percentage-based schemes being pursued elsewhere in Scotland.

The submission highlighted uncertainty around how the council’s proposed definition of a “room/area” would work in practice for self-catering accommodation, campsites and other tourism businesses. It also questioned whether major online travel agencies, such as Airbnb and Booking.com, would be geared up to support the proposed system.

Hisashi Kuboyama, Engagement Manager for FSB Scotland, said: “Argyll & Bute is one of Scotland’s most important tourism destinations, and we recognise that a well-designed visitor levy could provide additional investment that benefits visitors, residents and local businesses alike.

“However, the council’s current proposal leaves too many important questions unanswered. Small accommodation providers need clarity on how the scheme will operate, how it will work with online booking platforms and what support will be available if and when problems arise.

“Many of the businesses expected to collect this levy are small family-run firms, guest houses, B&Bs and independent accommodation providers. They do not have the same resources as larger hotel chains, so it is vital that the system is practical and proportionate.”

FSB also raised concerns that a flat £5 charge would disproportionately affect lower-cost accommodation providers. While a £5 levy represents just one per cent of the cost of a £500 room, it would amount to a 10 per cent surcharge on a £50 room, placing a heavier burden on budget accommodation and many independent operators.

Mr Kuboyama added: “The experiences of businesses in Edinburgh show the challenges that can emerge when visitor levies are implemented quickly. Argyll & Bute Council should take the time to get this right rather than rushing ahead with a model that could create confusion and unintended consequences.

“Before any final decision is taken, the council should provide much greater clarity on the operation of the levy, engage further with the accommodation sector and commission a fresh economic impact assessment based on the new flat-rate proposal.”

FSB Scotland’s engagement with local accommodation providers suggests firms are already dealing with difficult trading conditions, including rising energy, food and insurance costs, while facing increasingly price-sensitive consumers.

The business organisation is also calling for any revenues generated through a visitor levy to provide genuine additional investment in local transport, parking and visitor infrastructure, rather than replacing existing council spending commitments.

The organisation recommends further consultation with accommodation providers and a new economic assessment before the council proceeds with implementation.