The Board of Argyll and the Isles Tourism Cooperative (AITC), representing tourism and hospitality businesses across Argyll and the islands, has reaffirmed its opposition to the proposed year-round £5 Visitor Levy under current conditions.

AITC supports investment in infrastructure and services that benefit visitors, residents and communities. Well-targeted investment could improve the visitor experience and support the region’s economy. However, we do not believe the Council has yet demonstrated that the benefits of this proposal would outweigh the costs and risks.

The proposal should be assessed on its overall effect on the visitor economy. That means considering the benefits of the investment alongside collection costs, costs to operators and any reduction in visitor spending.

Business pressures and visitor affordability

Our concerns reflect the combined pressures facing businesses and their customers. Employment, energy, insurance and regulatory costs affect operators’ ability to invest and employ staff. Accommodation and travel costs also influence the affordability of a visit.
An additional charge could encourage some visitors to shorten their stay, visit less frequently or choose another destination. This could affect spending in restaurants, shops, attractions and activities, as well as accommodation.

These are potential effects that require assessment. General research on visitor affordability provides useful context, but specific modelling is needed to understand how visitors would respond to the proposed charge in Argyll and Bute.

An uneven proportional charge. A flat £5 levy represents a larger proportion of the price of lower-cost accommodation. Before any additional VAT, it equates to:

• 20% of a £25 campsite pitch.
• 5% of a £100 room.
• 2% of a £250 room.

These examples assume a £5 charge per pitch or room per night. They illustrate the difference in the proportional charge. Further assessment is needed to establish how this would affect bookings, visitor spending and business viability across different accommodation types.

The Council should also examine the cumulative cost for longer stays and bookings requiring several rooms, along with any proposed exemptions or limits.

Particular concerns for island and remote communities

The assessment must account for Argyll and Bute’s geography, including the cost of reaching island and remote destinations and the effects of transport disruption.

AITC is concerned that an additional accommodation charge could compound these pressures. The Council should assess whether the proposed investment would deliver sufficient benefits to the affected communities, and how those benefits would be distributed.

The Council should also examine potential changes in accommodation availability and the use of unmanaged overnight locations.

Costs and responsibilities for operators

Accommodation providers would be responsible for administering the levy. Before proceeding, operators need clear information about collection, record-keeping, reporting, payments and exemptions.

AITC is calling for a full assessment of initial and ongoing costs, including booking-system changes, staff time and payment-processing charges. Assess any allowance for operators against these costs, with particular attention to small businesses.

The VAT treatment must also be clearly explained, including any implications for businesses approaching the registration threshold. The assessment should examine whether the scheme could encourage operators to restrict trading or reduce the accommodation they offer.

Establish the overall economic benefit

Gross levy revenue is only the starting point for assessing the proposal.
The Council should publish a clear breakdown showing projected annual receipts, exemptions, recurring administration costs and operator allowances. It should identify one-off implementation costs separately.

Alongside this, an independent economic assessment should consider:

• Changes in visitor numbers, length of stay and spending.
• Displacement to destinations without an equivalent charge.
• Effects on different accommodation types and visitor budgets.
• Impacts on island and remote communities.
• Costs borne by operators and possible changes in trading behaviour.
• The expected benefits of the proposed investment, where they would arise and when.
• This would allow businesses, residents and councillors to assess both the funds available and the wider consequences of raising them.

AITC’s request to the Council

AITC urges the Council to pause the current proposal until an independent assessment has been published and considered, demonstrating whether the expected benefits outweigh the costs and risks.

There should also be transparent arrangements for allocating funds, involving businesses and communities in decisions, and measuring results.

AITC’s participation in discussions about the scheme should not be interpreted as support for its introduction. We will continue to represent members’ concerns and seek practical safeguards while maintaining our opposition to the current proposal.

Our priority is investment that strengthens tourism businesses, supports employment and benefits communities across Argyll and the islands. We encourage businesses, residents, visitors and community organisations to respond to the consultation and explain how the proposal could affect them.