Cruise ship levy: consultation

12. Impact Assessments

As part of the Scottish Government’s approach to policy making, we will be considering a number of impact assessments to explore how a potential cruise ship levy might impact on a wide range of groups, communities, and people in Scotland. These impact assessments include the Business and Regulatory Impact Assessment, Equality Impact Assessment and Data Protection Impact Assessment. A range of other impacts will also be considered including on child rights and wellbeing, human rights, sustainable development, and the environment.

The Scottish Government is interested in the impact, positive and negative, of a cruise ship levy. This includes economic impacts and wider impacts on communities, the local area, and facilities and services. Discussions at the roundtable events highlighted a number of such impacts. These included that revenues could support the visitor economy through investment in improving the local visitor offer and supporting attractions through the low season, and also on potential negative impacts from a reduction in demand for cruise visits to Scotland.

This reduction in demand refers to the possible deterrent effect a cruise ship levy could have. Cruise industry attendees at the roundtable events highlighted that a cruise ship levy could lead cruise ship operators, in light of such a levy, to adjust cruise itineraries and reduce the number of cruises to Scotland, and therefore calls at Scottish ports (including those ports that do not have a cruise ship levy). If this reduction, or lower growth, in port calls happened it would have two effects. Firstly, it would mean a cruise ship levy would not raise the revenue anticipated; and secondly it would mean any positive economic benefits from cruise ship calls were reduced. This second impact could go beyond the local authority where the port was situated, and which decided to introduce a levy, as in some parts of Scotland cruise ship passengers will visit locations in other local authority areas (for example, cruise ships calling at Edinburgh will have passengers who visit locations in East, West, and Midlothian).

Whilst the consultation is about potentially giving local authorities the power to introduce a cruise ship levy in their own area, the Scottish Government must take account of the possible national implications of a cruise ship levy introduced by local authorities. This is relevant to a possible deterrent effect from such a levy. The potential repercussions of a local authority introducing a cruise ship levy on other local authorities, and Scotland as a whole, is therefore an aspect we will explore further and on which we welcome views.

As well as ships’ spending in port, such as on supplies or port services, cruise tourism mostly generates local economic activity through visitors’ spending. A 2019 survey (Ekosgen, 2020) estimated that cruise tourists spend around £43 per day in Scotland, less than the average for other overseas visitors. Adjusting for changes in prices since the survey was carried out gives a figure of around £55 in 2024. That report estimated that cruise tourists contributed around 0.7% of tourist spending in Scotland in 2019. However industry estimates put the total daily onshore spending per passenger at a higher figure of around £90 for 2022 (around £95 in 2024 prices), based on survey evidence on spend per passenger across Europe, including tours, and accommodation and inbound travel spend for embarking passengers (Scotland has a relatively low share of these embarking passengers) (CLIA, 2023). The Business and Regulatory Impact Assessment published alongside this consultation paper uses this higher figure, and estimates that cruise visitor and crew spending accounts for around 1.5% of overnight visitor spending in Scotland.

Despite this relatively small proportion of overall spend, surveys of local businesses and communities in the 2019 report found that a majority of businesses and communities surveyed in Orkney and Shetland thought that cruise tourism has increased visitor spend at attractions and in local businesses significantly, generating new employment. Survey responses from those in towns including Stornoway, Lerwick and Castle Bay also reported benefits in the summer arising from increased footfall in the town centres. Despite this, there were also reservations about the benefits from cruise passengers, who tend to spend limited time on shore, and are not able to travel far from the port in the time they have available.

The impact of a cruise ship levy on island authorities in Scotland is potentially different from those on mainland coastal authorities. On island authorities spend by cruise ship passengers who are disembarking from a cruise ship in one local authority area will occur in that same local authority area. However for some mainland ports that is not the case, with research indicating that a significant proportion of locations visited by cruise ship passengers are in other local authority areas.

In considering a potential cruise ship levy the Government is taking an evidence based approach, including in exploring and assessing the business and regulatory impact of any such levy. This is set out in more detail in the accompanying partial Business and Regulatory Impact Assessment (BRIA) which considers the possible impact of giving local authorities the power to introduce a cruise ship levy. Possible areas of impact could be in relation to employment, spending by passengers and/or crew, and local facilities and services.

The partial BRIA indicates that the main groups that could be affected by a cruise ship levy are:

• Cruise ship operators;
• Port operators;
• Cruise ship passengers;
• Other businesses supplying the cruise ship sector;
• Local businesses offering products and services to cruise passengers and crew;
• Local residents and general public;
• Local authorities.

Question 16: What impact do you think a cruise ship levy would have on the following? Please select very positive impact, somewhat positive impact, neither positive nor negative impact, somewhat negative impact, very negative impact, or don’t know.

• Cruise ship operators
• Ports
• Businesses linked to cruise ship industry
• Local Communities
• Local authorities
• Scotland as a whole

Please provide the reasons for your answer(s). This helps with developing a robust BRIA which considers as wide a range of impacts as possible. If there are any other groups that would be impacted by a cruise ship levy please also list them below, together with the extent to which you believe they would be impacted.