The decision, made on 6 August 2025, has been met with fierce criticism from business leaders, who have labelled the plan “economic madness” and a “gamble” with the local economy.

The levy, which cannot be introduced before 1 April 2027, would add an estimated £4.90 to the average £70 hotel room per night. The council intends to use the revenue to boost economic growth by investing in funds designed to attract major conferences, cultural festivals, and sporting events.

Councillor Alex McLellan, convener of finance and resources, defended the decision, stating: “The income generated from the visitor levy, paid by those visiting the city, will provide a huge boost to our local economy.”

He added: “Across Europe we are paying similar amounts to stay per night subsidising their thriving economies, and we should do the same to ensure we can compete.”

However, business organisations have warned the rate, potentially one of the highest in Europe, could deter visitors. Mike Duncan of the Federation of Small Businesses (FSB) called for an Aberdeen-specific economic impact assessment to understand the potential consequences. “What works for Paris or Barcelona, for example, might be very different to what works for Aberdeen,” he commented, highlighting a Welsh government study that found a similar levy could reduce tourist numbers.

The FSB also raised significant concerns about the burden on the smallest operators, such as guesthouses and B&Bs, arguing that those not registered for VAT should be exempt as they will be “disproportionately impacted”.

This sentiment was echoed by Fiona Campbell of the Association of Scotland’s Self-Caterers, who condemned the decision. “To impose a high flat-rate levy (7%) while ignoring the very real costs associated with administering it – including third-party commissions now charged on the levy portion of nightly rates — is entirely unsustainable,” she said, pointing to weakening demand and shortened stays already affecting the sector.

Ms Campbell accused the council of a “rush for an easy revenue raiser” and urged them to devise a scheme that is “deliverable, in a way that doesn’t destroy the very sector it aims to benefit.”

Under the Visitor Levy (Scotland) Bill, the charge will apply to most forms of overnight stays, including hotels, self-catering accommodation, and campsites. Cruise ships and motorhomes are exempt, as are visitors in receipt of disability benefits.