Should cruise ship passengers be charged a tourist tax to visit Scotland?

ITV News

21-05-2025

Locals in Shetland's main town and port of Lerwick are undecided on whether a tax would be a good thing in order to pay for infrastructure investment, as ITV News Scotland Reporter Louise Scott reports
Words by Scotland Reporter Louise Scott and Scotland Producer Stephanie Docherty
The Scottish government is exploring the idea of giving local councils the power to charge a levy for cruise ships.
After bringing in the Visitor Levy Act last year, which allows a tax to be charged on certain overnight stays, some have argued the principle should apply to those visiting by cruise ship.
A public consultation is now seeking views on the benefits and problems a cruise ship levy could bring.
Cruise tourism is on the rise in Scotland, particularly across the islands, where it has become a major industry, creating jobs and providing a boost to the economies of the small communities.
Last year, there were around 1,000 cruise visits into Scottish ports, which brought 1.2 million passengers - an increase of almost 400,000 compared to five years ago.
The sector is particularly important in islands like Shetland, where cruise passengers now account for around 20% of all visitors.
Locals in its main town and port of Lerwick are mixed about whether a tax would be a good thing in order to pay for infrastructure investment, as many are worried it could hinder the crucial business opportunities the cruises provide.
Ross Manson is the co-owner of No 88 Kitchen and Bar in the town, and he has adapted his business's opening hours to tie in with the cruise ship timetables and even the nationalities of its passengers.
"Each of the different cruises brings different people, different numbers and different spend, so over the time that we've been open, we have tried to learn from the previous year and then put that into action this year to be able to adapt," he told ITV News.
"We can have a massive difference on spend and what they are spending on, depending on the country they are from. An ideal cruise boat is when it's filled with American tourists and docked just outside the restaurant."
Mr Manson and other hospitality businesses have calculated that there are a maximum of 150 seats in the town's restaurants or cafes at any one time, so when some cruises carry 3,000 passengers, this can create a problem.
"There's a lot of people that can leave a bit disappointed that they've not managed to get a seat or a table in the restaurants or cafes," he added.
Mr Manson believes a cruise ship tax could be positive if the money was used to improve the local infrastructure around the island, including transport, public toilets and Wi-Fi, which are all under strain when a large cruise comes in.
He said: "I think it would maybe stop people coming off that didn't have an interest in seeing the place or experiencing it. And definitely, I think the money should be spent on facilities that would improve the local areas. There is no point in you paying a cruise ship levy and then the money disappears into something that no one ever sees."
Lerwick has a population of around 7,000, so when a big cruise docks, it means that number rises by another 50%, which is why many local people decide not to come into town on those days as the streets, shops, cafes and roads are too busy.
The local council leader, Emma Macdonald, says it is a difficult balance between ensuring Shetland continues to be a popular tourist destination and meeting the needs of the local community.
"It is really important that we do have a good industry around cruise ship visitors, but we've also got to keep in mind that they can't have an impact on the services that people rely on day in and day out," she said.
"We don't want anything to happen that will make people choose not to put Shetland on their itinerary, because that's not good for the Port Authority and that's not good for the businesses who rely on that tourism."
The local council is looking at all options, including a point of entry levy, which would involve all visitors to Shetland paying one small fee, no matter how they travel or how long they stay.
Ms Macdonald added: "I think it's not looking likely that it (the visitor levy) will make sense for us as a small local authority. We just don't get enough people to make the level of burden on our small businesses worthwhile.
"It's thought that a point of entry levy that is maybe administered by Loganair or North Link Ferries, might make that kind of bureaucracy around it much easier. So we think that that is something that's worth looking at. But obviously, all these options are still out there.
"We don't want people not to be able to afford to come here. Shetland is a beautiful place to come. I think it's just all about balance of making sure that we fully understand what we're doing."
The British Port Authority says it has serious concerns and is against any form of cruise ship levy being introduced in the UK.
The Director of Policy & External Affairs at the British Ports Association, Mark Simmonds, said: "It is alarming to see the Government pressing ahead with a consultation on plans that have no clear aims.
"Local levies in parts of Scotland will alarm and confuse cruise industry planners, who book visits years in advance, and threaten growth and investment across Scotland as vessels tend to call in multiple ports.
"To raise any significant revenue, a levy would need to be set at a level that would very likely deter cruise ships calling in Scotland.
"The net result would be a loss to the Scottish economy with no real boost to council coffers.
"The ports and cruise industries are both open to engaging with national and local governments to solve specific issues and always have been.
"A new tax on a successful and growing industry will simply make Scotland less attractive to calls in what is a highly competitive and mobile market."
The Scottish Government Finance Secretary, Shona Robison, said: 'The tourism sector is a crucially important part of the Scottish economy and cruise visits are increasing.
"The consultation will help to inform the Scottish Government's decision over whether or not to bring forward legislation, and it is really important that we hear from a wide variety of voices on this matter.
"We want to hear from those with views and knowledge in this area, including local authorities, those involved with the cruise ship sector, ports, island communities, those involved with tourism, and others, including businesses large and small."
The consultation is open to the public until May 30.