Island and rural councils in some of Scotland’s most popular tourism destinations have paused plans to introduce a visitor levy, following strong public opposition and concerns about the fit of the proposed national model.
Last week, Destination Orkney, Outer Hebrides Tourism and the Shetland Tourism Association jointly wrote to the Scottish public finance minister. In the letter, they said the Visitor Levy (Scotland) Act 2024 was “not suited to island communities” and asked for a rethink. The intervention confirmed that all three island authorities – Orkney, Shetland and the Western Isles – have now shelved their levy plans, at least in the short term.
In Orkney, a consultation carried out earlier this year found 93% of respondents opposed an overnight visitor tax, and, among accommodation providers, this rose to 95%. Shetland saw similarly strong resistance, with 94%.
In the Western Isles, a feasibility report published this spring showed tourism is thriving. The region welcomed 389,100 visitors in 2023, up almost 22% on the previous year, contributing an estimated £93 million to the local economy. It also found that accommodation is overwhelmingly provided by small, self-catering businesses – more than 1,200 of them – collectively offering around 7,900 beds.
Despite the sector’s growth, Western Isles Council (Comhairle nan Eilean Siar) has also opted to pause the levy proposal after the report suggested any financial return from an accommodation-based tax would be modest, while the administrative burden would fall on small operators.
In South Ayrshire, similar concerns have led to a full withdrawal of the proposed tourist tax following a public consultation where 79% of respondents were against the levy and just 15% supported it.
By contrast, larger urban councils are pressing ahead. Edinburgh is set to introduce a 5% overnight levy from July 2026, with expected annual revenue of up to £50 million. Glasgow, Highland and Argyll and Bute councils are also exploring similar schemes.
A cruise ship tax is under separate discussion with The Scottish Government which could offer island authorities another tool for managing high-volume tourism. For example, instead of a charge on overnight stays, the three island groups are proposing a flat-rate levy collected at ferry terminals, airports or other points of entry, which they say would better reflect their day-visitor tourism patterns, and citing pressures on infrastructure when thousands of cruise visitors arrive in a single day.