Proposed Cruise Visitor Tax Meets Opposition on Scenic Islands

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The picturesque Shetland islands in Scotland, known for their scenic beauty, relaxing atmosphere, and abundance of wildlife, are currently at the center of a debate regarding the imposition of a visitor tax on tourists, including those arriving on cruise ships. 

In its current form, the new bill would impose a tax on visitors arriving and staying in the Shetland Islands, yet exempting those guests arriving by cruise ships.

One political party has now argued to include cruise ship visitors, which has led to opposition by local stakeholders, many of whom rely heavily on revenue generated by cruise ships visiting the region.

Shetland Islands Look At Taxing Cruise Ship Visitors

The Shetland Islands, an island group located between Scotland and Norway, and the northernmost part of the United Kingdom, is one of the most popular wildlife destinations in Europe. Known for an abundance of birdlife, seals, passing whales, and other animals, the island group has become an important cruise destination in the last couple of years. 

While many acknowledge that cruise ships have a significant role to play in the local economy, those same ships also have a privileged position at this moment. Visitors to the Shetland Island could soon be charged a visitor tax, a bill that is being considered by parliament. However, the same law does not include cruise ship visitors. 

One political party, The Scottish Liberal Democrats, led by MSP Beatrice Wishart, has voiced its opposition to excluding cruise ships from the new bill. 

“Cruise ships are a large and welcome part of Shetland’s tourism sector but with the loophole that would mean cruise ship visitors would not be liable to pay this levy is unfair and that provision needs to be addressed in the bill,” Beatrice Wishart said to Shetland News.

Holland America Ship Lerwick, Shetland Islands
Holland America Ship Lerwick, Shetland Islands (Photo Credit: Darryl Brooks)

The Liberal Democrats feel that exempting cruise ship passengers from paying to visit the Shetland Islands above what they pay in port fees and cruise fares is justified. The impact that cruise ships have on local services, infrastructure, and the environment, is significant.

Wishart: “In some places, the volume of cruise ship visitors can have a larger impact on local services than visitors staying in hotels or self-catering or B&Bs. Under current proposals, only those staying overnight in bricks and mortar would pay the levy.”

The visitor levy is not the only tax that cruise ships sailing to the Shetland Islands would need to pay. There are plans for emission taxes to be levied across Scotland for visiting cruise ships, and those sailing to the Shetland Islands already pay £4.56 to the local port authority. Combining those three makes visiting Scottish ports less attractive for cruise ships. 

Opposition from the Port Authority

Visiting cruise ships and expedition ships play a large role in the local tourism industry, generating funds not just for local businesses, but also for wildlife conservation. This is especially true at Fair Isle, a popular area for visiting expedition cruise ships that come here for the vast abundance of birdlife. 

The Lerwick Port Authority has raised concerns about the proposed tax’s impact on Shetland’s attractiveness as a cruise destination. Port Authority Chief Executive Calum Grains pointed out the already significant contributions of the cruise sector to the local economy, including job creation and visitor spending.

Cruise Ship in Lerwick, Shetland Islands
Cruise Ship in Lerwick, Shetland Islands (Photo Credit: Yuriy Chertok)

“The unknowns surrounding the introduction of any new taxation, either through the Visitor Levy or the proposed new Cruise Tax from the Scottish Green Party to tackle emissions is concerning and unsettling for the industry,” Grains said.

Also Read: Another Cruise Destination to Limit Cruise Ship Arrivals

“We are following the discussions closely as any new tax could have significant impacts on the competitiveness of Shetland as a destination and how Scotland is perceived more widely within the cruise industry.”

The cruise sector’s economic contributions are undeniable. Lerwick Harbour’s latest traffic figures show a 37% increase in cruise ship calls in 2023, and a 46% rise in overall passenger numbers, consistent with other ports across the UK.

In 2023, Lerwick Harbour, the main arrival point for cruise ships, welcomed 123,902 cruise passengers, more than double the previous year’s figure of 58,450. Just in passenger port fees, this generated more than half a million pounds.

Despite the ongoing debate, Lerwick Port Authority remains optimistic about the future, with 156 cruise ships booked for the summer of 2024, the port is looking at a 17% increase from the previous year. Whether those numbers will keep increasing with additional taxes for cruise passengers remains to be seen. 

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