Visit Mull and Iona DMO response to the proposed Visitor Levy Consultation by Argyll and Bute Council
There is no support for a Visitor Levy, as it is currently proposed, by the members of Visit Mull and Iona (VMI), the recognised Destination Marketing Organisation for the islands. VMI has 153 members representing 290 Mull and Iona businesses across all hospitality sectors. There is overwhelming concern amongst our membership that the Visitor Levy as proposed is not only damaging for our vital tourism sector but damaging 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 outline by our members are:
1. The Visitor Levy in its present form set down by the Scottish Government is an unacceptable model for island communities
2. The visitor economies of Mull and Iona are in decline and therefore a Visitor Levy is not appropriate
3. 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.
1. The Visitor Levy, in its present form set down by the Scottish Government, is an unacceptable model for island communities
It is clear that the one-size-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. Our members believe that Argyll and Bute Council should have rejected the conditions of the Visitor Levy as flawed, and not progressed to consultation. In particular the legislation is not suitable for islands, which account for 17.5% of the population of Argyll and Bute
The Scottish Government legislation lays out certain conditions that Councils must follow:
a) The legislation is named a Visitor Levy. This is misleading as the Levy includes residents’ overnight visits which are not recreational or business. These types of stays are much more likely for island communities and therefore the Levy is a tax on island life. The Visitor 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 to communities and businesses for services.
b) Exclusions exacerbate existing problems. Day visitors, motor homes and cruise ships are not included in the Levy which 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 outside campsites to avoid paying the Levy. Cruise ships will swamp island communities with no means of control.
c) Accommodation providers must gather the Visitor Levy. This puts an unacceptable, unfair, bureaucratic burden on accommodation providers, while other tyoes of hospitality businesses are unaffected. Mull and Iona can only be entered by sea (or for a tiny amount of visitors, by air). A Visitor Levy applied at the point of entry is the sensible option for Mull and Iona. It would remove the burden from accommodation providers and would allow the inclusion of income from substantial visitor segments such as day visitors, motor homes and cruise ships.
“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
d) The Levy must be a percentage rate. This is much 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 in turn is added to the accommodation provider turnover, which makes it even more burdensome to administer. This may put some businesses over the VAT limit who may then decide to reduce their offer to stay under the VAT threshold, or even close.
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 stated at a public meeting on March 13th that it has no intention of using its discretion to exclude businesses under the VAT threshold from the Levy.
VMI members are very disappointed that Argyll and Bute Council did not respond to the Scottish Government in that the Visitor Levy model would need a total review to be able to be fit for purpose in its geographical area of responsibility which includes islands. Instead, Argyll and Bute Council are at the forefront of introducing the Levy as it stands. We believe the Council is not taking enough time to properly consider all the many, unworkable negative implications of the legislation.
2. The economies of Mull and Iona are not appropriate for a Visitor Levy
a) There are no economic statistics for Mull and Iona. Visitor statistics are included with Argyll and Bute which are not representative of Mull and Iona, which are much more dependent on visitors for their economy. It is therefore not possible to judge the impact of the Visitor Levy on Mull and Iona without an economic impact study. The current impact study which the Council say they undertook is not applicable to Mull and Iona.
b) Downturn in accommodation bookings. Many VMI accommodation members have reported a downturn on income for the past two seasons, as much as 15%, partly due to the ferry disruption. VMI lost 8 bed and breakfast members, who closed due to the Short Term Let tax. A decline in accommodation bookings affects all tourism sectors
c) The ferry disruption. The disastrous failure of our ferry fleet since 2019 will continue throughout 2025. The high level of ferry breakdowns coupled with a reduced service for the 2025 season has already caused many accommodation cancellations. The negative ferry media coverage and unreliability continues to put off even the most loyal visitors to the islands. A Levy is just another reason not to visit. Argyll and Bute say the ferries will be running by 2027 when the Levy is introduced. But how can they predict that visitor confidence will return, that new ferries which are delayed will arrive and the current fleet, which is disintegrating at a frightening pace, will last.
d) Area exclusions. The Visitor Levy Act allows Councils to decide whether an area which is part of a Local Authority Area can be excluded from the Visitor Levy. 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 or economic downturn?” No clear answer was given. Many of our members feel that Mull and Iona should be excluded, because of the state of the economy the fact that Levy income is not guaranteed to be spent where it was earned.
3. 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 is inadequate. The three surveys aimed at visitors, residents and businesses are biased towards the benefits of a Levy and the tone gives the impression a Levy is being introduced. Our members felt the questions were not relevant to what they wanted to say. There is no upfront question “Do you agree with the introduction of a Visitor Levy”. This question is in the wrong section about the levy 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 included are not in the survey. The Visitor Levy Survey gives no indication that residents are included as visitors for Levy purposes.
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 does not state that Councils have the ability to invest in tourism infrastructure and services through a variety of sources. The tone of the question suggests pressure to support a Levy as the only option for investing in tourism.
b) Leaflets are misleading: The Council states in its printed leaflet which goes to every household that “A Visitor Levy is a charge paid by visitors for overnight stays”. It does not reveal that residents pay the Levy on all essential overnight stays from cancelled ferries to giving birth, which are nothing to do with “visiting”
c) No effort is made to engage with island stakeholders for testing or consulting. The Scottish 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” This has not happened on Mull and Iona. Visit Mull and Iona, as a DMO would expect to be contacted. Instead, letters regarding the pre- consultation from August to December 2024 sent to all 32 Councillors and our MSP received one response from Councillor Anne Horn.
Many people do not clearly understand the impact of the Levy, or how they will be affected, and therefore are not aware how important it is to give their opinion.
The Consultation therefore does not follow the Gunning Principles for Consultation or the Scottish Government Consultation Good Practice Guidance.
The message from VMI membership is clear. The proposed Argyll and Bute Visitor Levy will damage the vital Mull and Iona accommodation sector, the daily lives of all islanders and the visitor economy of the islands.
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. If the Council wish to introduce a Visitor Levy, the whole consultation process must start again, with lessons learned on the many negative consequences of the current Visitor Levy model and the defective consultation process.
Visit Mull and Iona DMO Steering Group
