Festivals urged to book a year ahead to avoid tourist tax

The Herald Scotland

6 days ago

Under the council's plans for the introduction of the new levy, the summer festivals, their performers and audiences will be among the first to be affected by the charging regime.
It will apply to stays in the city from July 24 next year, just days before the main 2026 festivals season is due to get underway.
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Thousands of advance bookings are expected to be made over the next two months by festivals and venue operators to try to keep their costs down by avoiding the first year of the levy.
However Fringe Society chief executive Tony Lankester admitted many Fringe performers and companies were not likely to be book accommodation until next year, if they have not committed to return to the event or are unsure when they will be in the city.
Tony Lankester is chief executive of the Edinburgh Festival Fringe Society. (Image: Gordon Terris)
The Fringe Society has estimated that artists and other festival workers could generate around £1.1m for the visitor levy when it is up and running.
Much more will be generated during August by visitors to the city for the festivals, which are expected to attract an audience well in excess of three million over the next few weeks.
Edinburgh's visitor levy will apply to booking for stays in the city from July 24 next year - if they are made after the start of October. (Image: KEN JACK/ Getty Images)
However the council has not yet set out what proportion of visitor levy income will be reinvested in the festivals and what they can spend it on.
Edinburgh councillors gave the final approval earlier this year for the introduction of a visitor levy scheme which is expected to generate up to £50m a year by 2028-29.
Under the proposals – which will affect hotels, self-catering properties and short-term lets – 35 per cent of the funds raised will be ringfenced for 'culture, heritage and events.'
The council last month unveiled the membership of an independent forum which will make recommendations to the council on how the income raised should be spent, although final decisions on initial spending plans will be taken by councillors later this year.
Lori Anderson, director of Festivals Edinburgh, the group formed nearly 20 years ago as part of efforts to protect and develop the city's world-leading reputation for cultural events, will be representing them on the visitor levy forum, which is also includes tourism industry leaders, union representatives, community groups and heritage campaigners.
Ms Anderson said: 'There is currently a window before the visitor levy will apply. We have recommended to the festivals that they try to book accommodation earlier.
'A number of them will have to pay the visitor levy for those artists whose accommodation they support.
'We have given them the dates and advised them that it if they are in a position to make advance bookings it might be advantageous to try to do that.'
Mr Lankester said: 'The council are not going to start charging it until October.
'A lot of people are going to be book now for next year's accommodation so they won't have to pay the visitor levy.
'The pot in the first year definitely won't be as big as it is projected to be in future years as a big chunk of advance bookings won't contribute to it.
'I'm sure many people won't book until next year because they won't know yet if they are coming to the Fringe or which dates they will be coming on.
'But I would suspect that some of the venues and other festivals are block-booking now or will block-book before the visitor levy kicks in.
'If the Fringe Society was a business which booked accommodation, which we don't, we would absolutely be doing that.'
Ms Anderson said she expected the festivals to 'reap the benefits' of the visitor levy in future years as long as they are made a 'priority' for investment by the city council.
She added: 'The festivals are obviously going to have to pay more for their accommodation costs to pay for the visitor levy.
'We would hope their way would be some mechanism or way for that investment to be recovered by the festivals. They are one of the huge drivers of visitors in the city. We would hope to see that that investment could filter its way back to those that are driving tourism in the city.
'We really hope that the festivals are a priority for the visitor levy, but that hasn't been decided yet.
'It is a really complex scheme. The council officials are working hard on it. They have a timetable to meet and they need to ensure that the scheme works at the beginning of the cycle.
'The festivals have been on standstill funding (from the council) for a long time. The visitor levy is an opportunity to really invest in sustaining them, and allowing them to grow and develop.
'The key thing about the visitor levy is that it's new money. There's unlikely to be any new moment from anywhere else. If the visitor levy is here to stay, it is an opportunity to do some really interesting long-term planning.
'It is important there is a strategic approach which really benefits the city, really interesting projects can be delivered which make the city more welcoming for visitors and residents, and there can be infrastructure improvements and all manner of other things done which will help to support and provide the conditions which the festivals and others in the tourism sector need.
'The festivals would really like to see investment so that they can have some stability, develop their creative content and commissioning, and really innovate in what they offer.'
Mr Lankester added: 'We believe Fringe artists will be contributing around £1.1m to the visitor levy pot.
'Those artists are, by and large, not publicly funded. For us, it's about how we bring some of that money back to those artists.
Mr Lankester said he found it 'interesting' that council officials had already proposed that £1.7m from the visitor levy pot be ringfenced to help pay for the Tour de France coming to [[Edinburgh]] for the first time when the Fringe had not been allocated any funding.
He added: 'There is a clear process and a visitor levy forum. But it doesn't actually make decisions, it only advises. It will be making recommendations, which councillors can either choose to follow or ignore.
'The bits of the moving parts of the visitor levy that they are trying to get their heads round now are around collection mechanisms more than anything else.
'No-one knows yet how the visitor levy is going to play out. But it is definitely not going to be a panacea that solves everything in the city. A lot of people are hoping it is going to be. But it absolutely won't.'