Festival seeks tourist tax help as it faces hike in costs

The Herald Scotland

a day ago

Although the city council has predicted it will generate an additional £50m a year by 2028, the city's festivals do not know if they will see any direct investment.
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In a wide-ranging interview with The Herald, EIF chief executive Francesca Hegyi, said the rising costs faced by the city's major cultural events were no longer viable under current levels of funding support and financial pressures.
The EIF, which currently gets around £1.9m a year from the city council, has been on standstill funding from the city council since 2019 when it was hit with a nine per cent funding cut.
The Edinburgh International Festival got underway last week. Picture: Andrew Milligan/PA
Ms Hegyi called for a 'mindshift' in how the festivals are treated by the city council and the Scottish Government, and for greater collaboration between the cities major cultural events.
She suggested they could work together to explore broadcast partnerships and a shared box office system, which could help the festivals attract new commercial sponsorship.
Francesca Hegyi, chief executive of the Edinburgh International Festival, wants the event to get some form of rebate for the accommodation it books in future. (Image: Gordon Terris/Herald & Times)
Under the city council's plans for the introduction of the visitor levy, it will affect bookings for stays of up to five days from July 24 next year – just days before Edinburgh's 2026 summer festivals seasons will get underway.
The Herald told earlier this month how Edinburgh's festivals, venues and performers were being urged to book accommodation a year in advance to avoid the tourist tax.
Event organisers, venues and artists are being urged to take advantage of a "window" before the start of October, when the five per cent levy will start to be added to accommodation bills for the 2026 summer festivals season.
The EIF meets the accommodation costs of artists and crew working at the event, but is not expected to finalise its programme until the end of the year.
Ms Hegyi told The Herald: 'I actually think there is a massive opportunity around visitor Levy, actually, and I'm generally quite positive about it.
'Anything that increases the pot available to the city, for infrastructure, for communities, for festivals, and arts and culture in general, has absolutely got to be a good thing.
'I think the significance of the visitor levy shouldn't be understated because, to my knowledge, the first major source of new revenue that's come along for many years.
'The devil is in the detail about how it will work. The one hesitation I have about it is that, as it currently stands, this festival will between £50,000 and £60,000 worse off because we will be charged the levy when we book accommodation for our visiting artists and crew. The only certainty I have right now is that the festival is going to be worse off."
Edinburgh's festivals are represented on an independent advisory group which will produce recommendations on how income raised through the visitor levy should be spent.
Under current proposals – which will affect hotels, self-catering properties and short-term lets – 35 per cent of the funds raised will be distributed across 'culture, heritage and events.'
Ms Hegyi added: 'I would hate for us to be out of pocket as a result of the visitor levy. What I would like the council to consider is some sort of rebate mechanism for those cultural institutions and attractions which are the reason why visitors come to the city.
'I understand exemptions are difficult, but it would be really helpful if a rebate could be considered. It would just be perverse if a scheme that's meant to benefit cultural organisations ended up costing them money.'
The EIF was forced to scale back this year's programme due to uncertainty over its future Scottish Government funding. A long-awaited decision was put back from October to January after the government refused to sign off a budget for its arts agency, Creative Scotland, before setting out its own spending plans last December.
The EIF's core government funding, which had been pegged at around £2.3m for more than a decade, was increased to £3.25m for the current financial year and £4.25m annually for the following two years.
The city council's funding for the EIF is expected to remain just over £1.9m until at least 2027-28 under a three-year programme to support festivals, events and cultural venues in the city.
However the council has instigated a new 'Festivals City Leadership Group,' which also involves the Scottish Government, to help tackle the biggest challenges faced by the city's major cultural events.
Ms Hegyi said: 'One of the topics this group is look at is the whole question of accommodation and what we can do collectively to ensure that the festivals can be affordable in future.
'I think there is acceptance from everyone around the table that the status quo just isn't viable anymore.
'The idea that the festivals are sustainable in the long run under the current support mechanisms and what is being asked of festivals has gone.
'I think there's an acknowledgment that we've got to move on.
'For public funding agencies, that's about considering how they value the festivals in the round.
'What I'd like to see is a mindshift in the way that festivals are considered and treated, That's not necessarily about money.
"One of the challenges we all need to get grips with is the inherent fragmentation of the festivals. We're all different, separate and independent. We'll always be that way.
"But I think we probably could and should do more to coordinate to make it easier for residents and visitors who want to engage with the festivals in some way, and have a single front door to buy tickets.
"There is an appetite among some of the festivals to think in that way so we can be more coordinated. Our chances of attracting new forms of income - whether through broadcast partnerships or commercial partnerships - on a scale that isn't possible with an individual festival.
"One of the good things that has happened in the last year is that with the Creative Scotland settlements we've finally been able to move out of crisis mode, start to look a bit further ahead and start to dream a little bit."
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