Cruise Ship Levy: consultation analysis

13. A possible ‘point of entry’ levy

The possible use of a ‘point of entry levy’ has been raised by Islands local authorities or those including islands. This would give them the power to levy people arriving to visit an island, regardless of the transport used to enter the island.. A question about a point of entry levy was included in the consultation to gather additional views on this approach.

Q18. Do you believe local authorities with islands should be given the power to create a broader ‘point of entry’ levy for one or more islands in their area, if they wish to do so? Please provide the reasons for your answer.

Half (50%) of those answering Q18 agreed that local authorities with islands should be given the power to create a ‘point of entry’ levy for one or more islands in their area, 30% did not, and 20% were unsure. Individuals who answered were more likely to favour this approach, with 66% in favour, 22% against and 18% unsure.

Views were more mixed among organisations, with 31% in favour, 47% opposed and 23% unsure. However, views of different types of organisations varied considerably, ranging from 64% of local authorities in favour, compared to 82% of harbours and ports, and 75% of cruise industry respondents opposed. While 40% of tourism-related organisations were in favour, 33% were opposed, and 27% were unsure.

Half of respondents left an open comment at Q18. The most common themes were suggestions for implementing a point of entry levy, reasons for supporting it, and reasons against it.

Implementing a point of entry levy

A range of considerations for implementation were made by several respondents, if local authorities with islands were given the power to create a point of entry levy. A few respondents each called for:

• Exemptions for residents, essential workers, visiting family and friends, and freight.
• The visitor levy to be amended to include a point of entry levy to avoid double charges with the visitor levy.
• A comprehensive Islands Impact Assessment to be conducted. One organisation expressed the view that the lack of an Islands Impact Assessment for the visitor levy had led to issues with the design and structure of the legislation that negatively impacted islands.

Singular comments included:

• The need for tight controls.
• Considering the context of transport policy and island resilience strategies.
• Having a clearly defined rationale for a point of entry levy.
• Having consistent charges across different islands or local authorities.
• Embedding a point of entry levy within existing charge structures to reduce administrative time and costs.
• Expanding the point of entry levy beyond just islands to local authority boundaries.

“It's essential that any such levy is designed to avoid unintended harm to the community, local businesses or visitor experiences. For Shetland, that means ensuring the levy applies only to arrivals from outside the isles and does not capture local travel, such as inter-island ferries, day cruises (including wildlife and heritage tours), or cruise ships making multiple calls within Shetland’s waters. A flexible, locally informed approach is needed to avoid undermining vital transport links and smaller-scale tourism activities that are central to Shetland’s economy and life.” – Shetland Tourism Association

Support for creating a point of entry levy

Comments emphasising broad support for introducing a point of entry levy power for local authorities with islands were made by several respondents. This included suggestions for using a point of entry levy instead of any cruise ship levy, and comments that this power would be fair, easier to implement and has been supported in earlier engagement.

“The POE [Point of Entry] approach would be a far fairer approach for island businesses. Local accommodation providers on islands tend to be small operations with limited resources and to date they have expressed a strong rejection of introducing any levy under the current % based accommodation model. Expressing concern for impact upon their revenue and / or being pushed beyond the VAT trading threshold, the administration burden - in particular they resent both to being expected to be the collectors of a visitor levy on behalf of local government, and to collecting a levy from their customers when many other visitors are exempted.” - Outer Hebrides Tourism

Several respondents supported introducing a point of entry levy as they believed it could empower and give control to islands and support their local economies. Respondents noted that tourism-related issues differ by island and that the islands themselves best understand their individual context and needs. It was also thought that if islands had a choice on whether to enforce a point of entry levy and how it would operate, it could help to balance competition between the popularity of different islands for tourism.

Some respondents felt that a point of entry levy may help address tourism issues faced by islands. This form of levy could, for example, reduce overtourism, ease the pressure on local resources, and help address environmental concerns. Some respondents detailed existing infrastructure challenges resulting from tourism generally and not just visitors arriving on cruise ships, such as roads, transport and waste disposal. Again, it was suggested that a point of entry levy could reduce these strains on local communities and improve tourist amenities. Comments also noted that it may tackle issues with motorhome visitors, who respondents suggested contributed little to island communities.

Opposition to creating a point of entry levy

The most common argument made by some respondents who disagreed with a point of entry levy was that it was overly complicated in practice and could add an administrative burden on local authorities. It was also thought that the cost to implement a levy may outweigh any potential benefits it could bring. Other challenges that could arise from introducing a point of levy included deciding on exemptions, agreeing on where to collect a point of entry levy, variation across local authorities, and it was suggested that it could result in confusion and inter-island competition if the charges are inconsistent across regions. Some respondents disagreed as they felt it would be unfair to visitors or did not want local authorities to have additional powers.

Some respondents detailed negative impacts on islands that could result from a point of entry levy. In particular, it was noted that a levy could reduce the number of tourists if they were required to pay, which would then have negative economic impacts on the islands.

A few respondents expressed concern about wider negative impacts on Scottish tourism from a point of entry levy. It was suggested that Scotland could be a less desirable destination due to increased and inconsistent charges, leading to a competitive disadvantage.

Need for more detail and information

Calls for more information to be able to respond to this question were made by a few respondents. This included requests for more detail about a point of entry levy in this context and how it would work in practice, such as how the charge would be collected and who would be exempt.

A small number highlighted the need for further awareness and consideration of loopholes that may arise from introducing a point of entry levy. These include concerns that a point of entry levy would deter essential travel, the need for a clear rationale for a levy, and difficulties classifying visitor types. A few respondents left a similarly worded comment noting that: “The example cited in the consultation in this question is incorrect. The national government in Greece has the power over the levy and collects the payment; the local island/communities/ports do not have these powers”.