An Inverness hotelier has issued a new plea to Highland Council over a proposed tourist tax which could cost him hundreds of thousands of pounds.
Kingsmills Hotel Group chief executive Tony Story believes a new visitor levy could potentially “decimate” the Highland’s tourist industry.
The council’s public consultation ended on March 31 and Mr Story claims the vast majority of Inverness accommodation providers are against the idea.
Legislation means local councils are able to impose an added fee for stays in hotels and bed and breakfasts, self-catering accommodation and campsites and caravan parks from 2026.
Highland Council said money raised from the levy would go towards improving infrastructure across the region, such as roads.
Kingsmills Hotel Group owns Ness Walk and Kingsmills Hotel in the Highland capital.
Ongoing talks
Mr Story feels he has left the consultation in “a much better place” than beforehand.
However, he still has several concerns over the concept – including the research behind it.
He said: “Talks are continuing and Highland Council is definitely listening, which is promising.
“I am glad it hasn’t been rushed. There is now pressure on the Scottish Government to look at the legislation again.
“If it decimates the tourist industry here, the local authority will still be better off.
“What concerns me is the siloed thought process. They say it is 5% plus VAT, so 6%.
“It will be embedded in our rate and so we will end up having to pay more to booking sites too.”
Mr Story also feel rises in employer’s National Insurance and the recent collapse of the stock market help to paint a clear picture.
He added: “We’re in a position where the Scottish Government won’t pass on rates relief to hospitality businesses.
“Profitability has become extremely difficult. It’s absolutely horrific.”
‘The Highlands isn’t a city’
No “proper” economic studies over the potential impacts of a visitor levy in Inverness have been published, according to Mr Story.
He said: “You might say Inverness can handle it, but what about if you go up north to Wick? The Highlands isn’t a city – it is a region.
“I actually did a calculation on Ness Walk and Kingsmills Hotel and we already pay £4 million a year in tax – excluding corporation tax.
“The council said its target is £10m. How is that possible if our calculations see us losing £450,000 between two hotels?
“If it goes ahead as it is, I believe figures will massively overshoot it. A bit of work we’ve done shows the 5% plus VAT will more likely end up in the region of £30-40m.
“So could hotels be charged less? We’re all standing in amazement at what Donald Trump is doing with his tariffs, but we’re looking at doing a mini version ourselves.”
Inverness visitor levy plea
When Mr Story first heard of the visitor levy, the Inverness hotel boss was instantly against it.
He said: “When I first started with this I said ‘no, it’s an extra VAT’. Now, I would maybe accept £2 or £3 a night with no VAT.
“It should also be made clear this is a locally imposed authority tax, not a hotel tax.
“Maybe there are ways of doing it. I think I have met one person within accommodation providers who believes this is a good thing.”
He has also made a plea to Highland Council, saying: “If you must introduce this levy, then please make it one which won’t severely impact the accommodation providers.
“Look at what is provided and understand a lot of funding comes from business.”
Conversation