Tourist boss: we need politicians to cut visitor taxes

Tuesday 11 September 2012

Visitors to this country are faced with the added expenses of VAT, Visas and Air Passenger Duty. These must be addressed if Scotland is to compete globally in tourism, says Visit Scotland’s chief executive Malcolm Roughead, ahead of Wednesday's Energy, Enterprise and Tourism debate at Holyrood.

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Every day, tourism keeps the wheels of the Scottish economy turning, creating a ripple effect that touches every business and every person.

Tourism is more than just a business sector - it touches the economy and the psyche of the Scottish population in a way that other businesses just don’t do. It creates business deals and economic growth; it creates stories and experiences; it creates a feel-good factor and it enhances our image throughout the world.

The visitor economy has never been more keenly felt than in the wake of the Olympics, and the warm welcome felt by international and domestic visitors will lead them to not just visit the country again, but even consider investing, studying or working here. The tourism industry has not had it easy this year - with a long wet summer and a poor economic backdrop, which is why VisitScotland has launched a major campaign to appeal to those who have been putting off holidays or short breaks. With evidence showing that people have delayed their holidays because of the Olympics, VisitScotland is looking to support the tourism industry as it seeks to cash in on a last minute surge of people wanting to holiday in Scotland. VisitScotland has launched a robust £3million marketing push targeting UK ‘staycationers’ and encouraging them to make the most of a holiday at home. The overall campaign aims to deliver £80million in economic impact for Scotland and reach some 20million people UK wide. There is no doubting the power of tourism and its potential to be the economic engine room of the Scottish economy. From the smallest hotel or restaurant to financial services or life sciences, the visitor economy touches every business sector in Scotland. Our mantra is that tourism is everybody’s business, and it’s much more than rhetoric. Our ambition, and that of the tourism industry, is to grow the visitor economy and fulfil the potential which undoubtedly exists. But to do that there are three key areas we must address if Scotland is to compete globally. These areas are VAT, Visas and Air Passenger Duty. Together, these charges can add hundreds of pounds to a holiday to Scotland for an overseas visitor- affecting the value for money message we have been pushing throughout our marketing activity. Visitors come to Scotland for the people, the world class events, the landscapes, the golf, our heritage or whisky - to name but a few of our USPs. Scotland will never be a mass market destination, but quality, value for money and the personal touch are all high on the list for people coming here. But we must never forget that they can go somewhere else. To add extra charges onto the bill before they even get to Scotland makes us less competitive and therefore less attractive as a proposition. Across business we continue to charge 20% VAT to the customer, making us the second highest rate of VAT in Europe. At a time of intense price sensitivity we are competing against an average of 8.8% VAT across the rest of Europe - a very uneven playing field. We are one of only four (of 27) countries in the Euro-zone to charge the full rate of VAT on tourism accommodation. Clearly the business case needs to stack up if arguing for a cut in VAT levels but the benefits to the economy could be huge. It’s estimated that in one year in France 30,000 jobs were created following a VAT reduction on restaurant services. Other impacts such as a decrease in bankruptcies and greater investment in hotels have been put down to VAT reductions in Belgium and Germany. Visas continue to be a major barrier to growth, particularly from markets such as China and India. Whilst there is some progress, the application process continues to be user unfriendly and compares badly with the process employed by competitive destinations. The worry is that other countries are overtaking us in their desire to attract these two emerging markets. France attracted eight times more visitors from China last year than the UK and Germany six times. As we are not part of the Schengen agreement we are at a huge disadvantage and we need to find a way to sort this. China and India are absolutely crucial for future growth, not just in tourism. Scotland is hugely reliant on air access to bring international visitors here and Air Passenger Duty (APD) continues to ramp up prices - not great against a backdrop of visitors looking for value for money from their trips. The UK APD rates are the highest of any major European country. In fact, very few European countries charge APD and those that do, do so at a much lower rate than the UK. This means that any holiday maker from China or India pays on average £300 in APD to add the UK to their itinerary. There’s no room for complacency. Tourism is the most competitive industry in the world. Scotland is trying to shout above the noise from over 200 countries, all hoping to woo the next visitor. This is an industry which touches every part of Scotland, every business and every person living here. To meet our ambition we need to address the barriers in our way - and to grow tourism we need to act quickly. This is a fantastic industry - it is the shop window to the world - so let’s build on our success to date and work together to show that we can make this country shine, grow the visitor economy and bring significant economic benefit to the whole of Scotland.

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Tourist boss: we need politicians to cut visitor taxes

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