Promoters say they could support levy to fund arts and tourism as they hail bumper ticket sales

Edinburgh festival fringe companies have given their qualified backing to the idea of imposing a tourism levy in the city, as it emerged ticket sales this year had again broken records.

Influential promoters such as the Underbelly and Pleasance said they could support a so-called bed tax being considered by Edinburgh council as long as its proceeds directly funded the city’s arts and tourism industries.

The endorsement came as Edinburgh Festival Fringe Society said the event had broken the previous year’s ticketing record, with at least 2,839,000 tickets sold or issued for free by mid-afternoon on Monday for more than 3,500 shows.

Charlie Wood and Ed Bartlam, the directors of the Underbelly group of venues, which issued 422,000 tickets this month, said they were “big advocates” of the proposed tourism levy.

They said the tax could help protect “the whole year-round festival ecology and vital relationship with the city of Edinburgh. A tourism levy does not put tourists off visiting Paris, Rome or Venice and we don’t believe it will put them off coming to Edinburgh with all the city has to offer.”

Scottish Labour estimates a £2-a-night levy on all hotel and short-stay rooms would generate up to £2.5m for the council in August alone, to plough back into improved services and facilities.

August is the busiest month for Edinburgh’s hotels, when room rates surge and hotels fill to capacity. There are 49 new hotels with planning permission or seeking approval in the city. Airbnb-type lettings have also boomed in the city, compounding anxieties about Edinburgh’s capacity to cope with so many visitors.

The so-called transient visitor levy is being championed by Edinburgh’s council leader, Adam McVey of the Scottish National party, with the backing of Labour, the Scottish Greens and the Lib Dems, but is being resisted by the Scottish government.

Scottish ministers are worried by protests from the hotel and tourism industries that it would put off visitors: the UK already levies VAT at 20% on hotels. McVey was slapped down by Fiona Hyslop, the SNP’s culture secretary, in July after suggesting the bed tax could be ready to run in 2019.

Hyslop pressed McVey for more evidence he had consulted hoteliers and investigated the economic impact of a levy, which the industry says is lacking. McVey has yet to spell out exactly what the levy would be spent on.

Hyslop tweeted in July:

Fiona Hyslop (@FionaHyslop) ? ? ? So let’s be clear - you have no shared plans,no tourist business consultation and no agreement with the Scottish Gov.

McVey believes a levy would help deal with increasing resentment among residents irritated by visitors, by funding improvements to Edinburgh’s decrepit pavements and public spaces.

Underbelly and other fringe organisations said there must be full transparency about where and how a bed tax was used, and assurances it was not to offset government cuts. Anthony Alderson, of the Pleasance, said: “It is clear that much work needs to be done to determine what this money might be spent on and who will ultimately determine what it is spent on.”

Shona McCarthy, the chief executive of the Edinburgh Festival Fringe Society, said in 2016 that the policy worked well in other major European cities but the society said on Monday it needed to know more about Edinburgh’s scheme before backing it.

“We would be keen to see more detailed proposals for how a tourism tax would work in practice, with details such as where it would be levied and how the money would be distributed,” it said.

The city’s hoteliers and the UK’s tourism industry groups fear that if Edinburgh became the first to introduce it, the policy would be copied across the UK and councils would slowly increase the charge.

Many other Scottish local authorities are said to be watching Edinburgh’s campaign closely. Communities in Skye and around the North Coast 500 tourism route complain vociferously that the government and their councils do not invest enough in roads, laybys and public toilets while hoteliers, restaurants and shops enjoy a tourism boom.

Monica Lennon, Labour’s communities spokeswoman, said: “Local councils want to have the option of introducing a tourist tax and it should be up to them, in consultation with local communities, how best to spend the revenues. Ravaged by austerity, local councils need new opportunities to maintain services for the benefit of visitors, residents and local businesses and it is perplexing that SNP ministers are blocking this.”