Scottish hospitality faces regulatory challenges amid visitor levy and cup charge plans

By James Bayley

Published: 05 September, 2024

Scotland's hospitality sector is bracing for the impact of new regulations outlined in the Scottish government's Programme for Government 2024-25, including a visitor levy and a proposed 25p charge on single-use cups, which includes plastic beer cups.

The visitor levy, passed in May 2024, allows local authorities to introduce a tax on overnight accommodation stays, calculated as a percentage of the accommodation cost before VAT. The levy aims to generate funds for local services, particularly those used by tourists. However, concerns have been raised about its potential to increase costs for accommodation providers and possibly deter visitors, especially during a period of economic recovery. The levy will be implemented no earlier than spring 2026, following an 18-month consultation period.

Meanwhile, the 25p charge on single-use cups was first proposed by the Scottish government in 2019 as part of a wider environmental agenda. The charge gained formal traction in August 2024 when it was introduced for public consultation. The policy, modelled on the successful 5p plastic bag charge from 2014, aims to reduce the estimated 388 million single-use cups discarded annually in Scotland. Exemptions are planned for specific settings, such as schools and healthcare facilities.

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Leon Thompson, executive director of UKHospitality Scotland, voiced concerns over the cumulative regulatory pressures on businesses, highlighting the combined burden of the visitor levy, cup charge and potential restrictions on food and drink promotions.

“The Scottish government needs to put the brakes on planned regulation to allow our businesses to reach their full potential. Without action, hospitality’s potential will be curtailed, and we won’t be able to help deliver the economic growth the First Minister wants to see,” Thompson said.

“It was, however, positive to hear the First Minister talk about skills planning and, as a sector that can provide young people with fantastic careers, we look forward to working with the Scottish government to make sure hospitality plays a key role in these plans,” Thompson concluded.

These measures, while aimed at promoting sustainability and reducing waste, pose significant challenges for Scotland's hospitality sector as it continues to recover from economic difficulties.

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