Visit Mull and Iona DMO response to the Visitor Levy.
Visit Mull and Iona is the Destination Marketing Organisation for the islands with a membership of 153 representing 190 Mull and Iona businesses across all hospitality sectors. There is deep concern amongst our members that the Visitor Levy is not only bad for our vital tourism sector but bad for island life.
“This levy unfairly disadvantages islanders, both as residents and business owners, operating in such a remote location. Having to stay overnight somewhere is a common occurrence, whether attending medical appointments, school events for our children, mitigation for cancelled ferries or even accessing everyday services such as food shopping. These are not ‘visitor’ or ‘tourism’ activities, yet it would seem that they will be classed and ‘taxed’ as such and make island living even more tenuous financially.” Andy and Yvette Primrose, Ulva Hostel.
The main areas of concern are:
- The Visitor Levy set down by the Scottish Government is an unacceptable model for island communities
- The current Argyll and Bute Council consultation is inadequate, biased, and does not allow people to express an opinion on whether or not they think the Visitor Levy is appropriate for their area.
- The visitor economies of Mull and Iona are in decline and therefore a Visitor Levy is not appropriate
1. The Visitor Levy, set down by the Scottish Government, is an unacceptable model for island communities.
It is clear that the one-fits-all Visitor Levy model that the Scottish Government set down in legislation nationally is not suitable for all of Scotland. It may be suitable for cities such as Edinburgh but globally, a Visitor Levy is not generally accepted as good economic sense in rural areas, especially where tourism is declining, such as Argyll and Bute.
The Scottish Government Visitor Levy legislation lays out certain conditions that Councils must follow:
a) The title of the legislation is the Visitor Levy. The Visitor Levy is the title that must be used, but it is very misleading. The Levy is an accommodation tax on everyone who has a paid overnight visit for whatever reason. Services for the islands such as trades and healthcare which require to stay overnight will also be charged the Levy, increasing costs for island residents and businesses. These stays are much more likely for island communities and therefore the Levy is a tax on island life.
b) Levy exclusions must be adhered to. Exclusions such as day visitors, motor homes and cruise ships are not included in the Levy. This would exacerbate serious existing problem caused by these sectors in the environment and transport infrastructure of Mull and Iona. Mull is popular with day visitors travelling by car which puts a strain on the travel infrastructure. The Visitor Levy will encourage more day visitors which will further erode the island infrastructure with no monetary benefit. Motor homes will be encouraged to overnight outwith campsites to avoid paying the Levy. Cruise ships will swamp island communities with no control.
c) Accommodation providers must gather the Visitor Levy. This condition puts an unacceptable bureaucratic burden on accommodation providers, especially small businesses, who will have to work out the accommodation price from other aspects of the stay, such as food and services and then deliver these funds to the Council coffers. Accommodation providers are already under enough stress, with a wholly unreliable and reduced ferry service affecting their businesses as well as their daily lives.
d) The Levy must be a percentage rate. A percentage rate levy is more complicated to account for than a fixed rate, making extra work for accommodation providers.
e) VAT is charged on the levy: VAT is added to the Levy which is added to the accommodation provider’s turnover making it even more burdensome to administer. Having the Levy added to their turnover may put some businesses over the VAT limit. This may encourage some accommodation providers to reduce their offer by opening fewer months or having fewer rooms to keep below the VAT threshhold. Some may decide to close as the administration required to stay in business is increasingly not worth it.
The Scottish Government Legislation states:
“It’s at the discretion of the local authority to include or exclude businesses that fall below the VAT threshold because of the visitor levy scheme. A local authority must state whether it intends to include businesses below the VAT threshold in its visitor levy scheme.” Argyll and Bute Council has not communicated any intention of using its discretion for the VAT threshold.
VMI members are very disappointed that Argyll and Bute Council did not respond to the Scottish Government in that the Visitor Levy conditions would need a total review to be fit for purpose in its geographical area of responsibility, which includes islands.
Instead, Argyll and Bute Council is at the forefront of introducing the Levy with its unacceptable conditions. VMI believe the Council is not taking enough time to properly consider all the implications of introducing such a major piece of legislation to the diverse geographic Argyll and Bute Council area.
2. The current Argyll and Bute Council consultation is inadequate, biased, and does not allow people to express an opinion on whether or not they think the Visitor Levy is appropriate for their area.
a) The content of the Visitor Levy surveys are inadequate. The three surveys aimed at visitors, residents and businesses have come in for a lot of criticism. In particular the survey questions are biased towards the benefits of a Visitor Levy being introduced. There is no upfront question with a clear yes or no answer “Do you agree with the introduction of a Visitor Levy”. This question is in the wrong place at the end of Q7 about the levy percentage rate, and easily missed. Important questions where the Council has discretion, such as where businesses under the VAT level can be excluded or an area can be excluded are not in the survey. The Visitor Survey gives no recognition to the fact that residents are also visitors. One question reads like a loaded question “If you do not support a levy, how would you suggest that investment in our tourism infrastructure and services is paid for?” It gives the impression that Councils have no funding sources for tourism (for which there are a variety) and the tone of the question suggests pressure to support a Levy.
b) Leaflets are misleading: The Council states in its printed leaflets “A visitor levy is a charge paid by visitors for overnight stays” with no indication that residents having a paid overnight stays for any reason, from a cancelled ferry to a medical appointment will pay the tax. People are assuming, wrongly, that visitors are always tourists; they don’t think the Levy applies to them and are not taking part in the consultation.
c) Engagement with island stakeholders for testing or consulting The Scottish Visitor Levy legislation states that “once stakeholders have been identified, local authorities should make efforts to engage them in understanding their priorities. Simultaneously, local authorities should take this opportunity to test early thinking with these stakeholders” Visit Mull and Iona, as a DMO would have been very pleased to be consulted as we are a stakeholder. Instead, letters VMI sent individually to all 32 Councillors and our MSP in December 2024 expressing members concerns about the Levy, received no response.
d) Island impact Assessment: The Islands (Scotland) Act outlines the requirement for an island communities impact assessment for a new policy. Within the Visitor Levy Island Communities Impact Assessment, there is very little evidence of engagement with island communities and what there is seems to have taken place in 2019.
The management of the Visitor Levy Consultation therefore does not follow the Gunning Principles for Consultation or the Scottish Government Consultation Good Practice Guidance.
3. The economies of Mull and Iona are not suited to a Visitor Levy
a) There are no economic statistics for Mull and Iona. Visitor statistics for Mull and Iona are included with Argyll and Bute which are not representative of our islands which are much more economically dependent on visitors. It is not possible to judge the impact of the Visitor Levy on Mull and Iona without an economic impact study.
b) Downturn in accommodation bookings: Tourism accommodation businesses on the islands have reported a downturn on income for the past two seasons, due to the high level of ferry disruption. A decline in accommodation numbers affects all tourism sectors. Visitors to the islands have to face the cost of ferry transport with a totally unreliable service and then pay a Levy on top of that. Why does the Council not understand this will reduce visitor numbers?
“With the current struggles with the lack of reliable ferry provision, the state of the economy, the recent cost of registering for the Short Term Letting Licence and the overall extra cost to visitors in getting to the island, introducing a levy of any sort is without doubt going to put the islands at an increased disadvantage when it comes to tourism. We feel that this levy, certainly in its proposed state is unfair and unnecessarily burdensome to accommodation providers” Claire Ralston, Salen Hotel, Mull
c) The ferry disruption. The disastrous ferry disruption will continue throughout the 2025 season with no hope of any improvement until later in the 2026 season. The negative media coverage and unreliability continues to put off even the most loyal visitors coming to the islands. This is not the time to introduce another reason not to visit the islands.
d) Area Exclusions: The Visitor Levy Act allows Councils to decide whether an area can be excluded from the Visitor Levy as part of a Local Authority Area. VMI asked the question at the Visitor Levy meeting on March 13th “Could islands, such as Mull and Iona be excluded from the visitor levy because of the ferry failures?” The answer was that “The Levy won’t be introduced until 2027 and by then, everything will have changed”. But who knows what the future holds with the old ferries falling apart and new ones delayed?
In summary
The Scottish Government Visitor Levy legislation is highly flawed and Argyll and Bute Council have rushed into the potential to deliver a Levy without enough consideration. The whole concept of a Visitor Levy must start again, with lessons learned on the many negative consequences of the current Visitor Levy model and the inadequate consultation process.
Visit Mull and Iona Steering Group
