According to Edinburgh City Council, it is anticipated the levy will generate millions of pounds a year to reinvest in the city’s infrastructure and sustainable tourism from summer 2026. It is expected to raise between £45m and £50m a year by 2028/2029.
A formal 12-week public consultation will now take place in the coming weeks, which will look to gain input from residents, visitors and businesses.
This consultation will inform the final scheme, which will be agreed in January next year, allowing the 18-month implementation period to start.
The levy scheme will include visitors paying a 5% fixed fee of the accommodation cost per night, capped at seven consecutive nights.
Reasonable minimum
This will be the case for accommodation including hotels, short-term lets, hostels and bed and breakfasts but will exclude campsite stays.
UKHospitality Scotland warned against the proposed levy to an unsustainable level, following the first council vote.
Executive director Leon Thompson said: “The visitor levy will increase costs for visitors and businesses in Edinburgh and that cost must be kept to a reasonable minimum.
“It is concerning an even higher levy has been proposed than the 5% in the draft scheme. I would urge extreme caution against setting the levy at a level that could tip the balance towards this scheme having a detrimental impact to Edinburgh’s reputation as a leading destination.
“Business costs to set up and administer the levy will be significant and it’s positive the council has so far back a mechanism for businesses to recover their costs.
“UKHospitality Scotland will consult with members across Edinburgh during the consultation period and respond, reflecting the views of our members.”
Festival month
Meanwhile, August is the month Edinburgh hosts the Fringe Festival as well as various other festivals.
Figures from UKHospitality showed the events are expected to generate a rise of almost a third (30%) in daily sales for on-trade venues.
Furthermore, the trade body said hotels in the city were reporting “strong demand”, with an average occupancy rate of 79% throughout August, peaking at 86.1%.