The Scottish Tourism Forum (STF) – an independent membership body representing the interests of Scottish tourism businesses – is outraged that councils may be given the power to impose a tourism levy in their authority independently of central administration.

Condemnation by the STF on behalf of the Scottish tourism industry is in response to the independent Scottish Local Government Finance Review Committee’s final report – chaired by Sir Peter Burt – which backs Edinburgh City Council’s recommendation that the Scottish Executive should give local authorities the power to apply a discretionary tourism tax.

Alan Rankin, STF chief executive, said: “It will be disastrous for Scottish tourism if local authorities are given carte blanche to raise monies through taxing tourists. Such a move would take money out of local tourism investment and make Scotland uncompetitive.”

“We support the notion of public and private funding partnerships in driving forward tourism growth across Scotland, but this must be done with the private sector leading the local agenda.”

The tourism industry also argues that a local government administered tourism tax would put Scottish tourism at an unfair disadvantage against the rest of the UK and that, if applied pre-VAT, the government would receive a doubled income at the expense of consumers.

Tourism businesses are also querying how such a tax would be collected, who would control the funds and how would the money be spent.

Grant Hearn, Travelodge chief executive and operator of 22 hotels in Scotland, said: “Handing tourism tax powers to local authorities will have severe economic consequences for Scotland’s tourism industry. Travelodge re-invests profits in local jobs, new and upgraded hotels and lower prices for consumers. I will seriously rethink investing further in Scotland if this tax is adopted.”

“Tourism taxes have failed elsewhere in Europe and they will fail in Scotland. The bottom line is that tourism tax could price the 20.1 million annual visitors to Scotland out of a return visit. Attracting more visitors to stay longer is the key to raising the additional revenue needed for local government funding”

Travelodge research revealed that 77 per cent of people would be more likely to holiday overseas and 67 per cent would re-consider the length of their holiday if a tourist tax were to be imposed. Details: www.stforum.co.uk