Isles tourism organisations push for alternative visitor levy model

Destination Orkney has joined tourism organisations in Shetland and the Outer Hebrides in penning a letter to Scotland’s public finance minister, urging the government to allow island authorities to adopt a point-of-entry visitor levy instead of one that is accommodation-based.

The letter, signed by the heads of Destination Orkney, Outer Hebrides Tourism and Shetland Tourism Association suggests that this would be “more appropriate and workable approach to visitor levies for island communities”.

The three organisations claim that the Visitor Levy (Scotland) Act 2024 was “developed primarily with urban mainland areas in mind” and  “does not reflect the realities of island tourism”.

They write: “It did not undergo a full Islands Impact Assessment, and the result is a legislative framework that is structurally ill-suited to the needs and operating models of island communities.

“These are systemic issues that cannot be resolved through local scheme design alone.

“Unlike major cities, Orkney, the Outer Hebrides and Shetland lack large hotels. Our visitor economies are overwhelmingly composed of micro and small, often family-run businesses operating seasonally. This makes the administration of an accommodation-based levy disproportionately costly relative to the revenue it is likely to generate.

“In many cases, the costs of implementation, enforcement and compliance could exceed the income raised — risking turning what is intended as a funding tool into a net liability for local authorities and a burden on local businesses.”

The letter also suggests that an accommodation-based levy presents “wider social concerns” for residents travelling between islands for health appointments, work, and family reasons — but that to introduce exemptions would add “further cost and complexity” to the system itself.

The island tourism organisations claim that a “modest point of entry levy” — with exemption for residents — would offer a “far more practical and equitable alternative”. They stress that this approach has been back their members.

“In Orkney, 93 per cent of those consulted opposed an accommodation-based model, rising to 95 per cent among directly affected businesses,” the letter continues.

“In Shetland, 94 per cent of respondents also opposed the levy in its current form, which targets only paid accommodation.

“In the Outer Hebrides, 70 per cent of respondents opposed the levy in its current form.

“In contrast, there is clear support across all three communities for a point of entry model that is simpler, broader, and better aligned with the island context.”

Destination Orkney, Outer Hebrides Tourism and Shetland Tourism Association, have requested the chance to meet the public finance minister, Ivan McKee, to discuss this position further.