Share the tourist spoils around the country

From Edinburgh’s Fringe Festival to the North Coast 500, Scotland attracts millions of visitors each year, generating around £11 billion in visitor spend for the economy. But behind the headline figures lies a more complex picture. Only 40% of Scots believe there is a fair balance between the needs of local communities and tourism businesses.

As peak season comes to a close, the challenge for local authorities is clear: how to sustain tourism’s benefits while ensuring residents do not feel priced out, pushed aside or left behind.

Councils now hold important levers - from short-term let licensing to visitor levies – but success will depend on showing that these policies translate into tangible benefits for local people.

The NCL 500 has been a massive success for Scottish tourism, but are locals seeing enough reward? (Picture: SWNS)

Short-term lets and housing pressures

The rise of short-term holiday accommodation has reshaped housing availability in cities and rural hotspots alike. While visitors gain flexible options, residents often face reduced housing supply and rising costs. The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 introduced a mandatory licensing scheme, expanded in August 2024 to allow provisional licences, transfers and temporary exemptions of up to six weeks.

These frameworks give councils a clear legal basis to regulate short-term lets while preserving flexibility for operators. Applied effectively, they can reassure communities that housing is not being hollowed out by visitor demand, helping ensure Scotland remains a place to live as well as visit.

Congestion and transport strain

Amy Entwistle has more than 20 years' experience in real estate law

For many Scots, the impact of tourism is felt most on the roads. Over half of residents (57%) say tourism increases traffic, while 53% believe it reduces parking for locals. Congestion is not just an inconvenience - it affects commuting, public transport reliability and emergency services.

The Visitor Levy (Scotland) Act 2024 gives local authorities the power to introduce a discretionary charge on overnight stays, with revenues ring-fenced for reinvestment in local infrastructure and services. Used effectively, this mechanism can channel funds directly into road maintenance, improved transport links and expanded parking - measures that make daily life easier for residents while enhancing the visitor experience too.

Concentration in hotspots

Certain destinations bear the brunt of visitor numbers, creating seasonal overcrowding that stretches public services. Edinburgh’s festivals are world-famous, but they also test the city’s housing, transport and waste systems. In island and rural communities, surges of visitors during peak months can overwhelm ferry services and local supplies.

VisitScotland’s latest responsible tourism strategy, supported by £2 million of government funding, aims to relieve this pressure by promoting off-peak travel and encouraging visitors to explore lesser-known areas. It highlights Scotland’s diversity — from the Borders to Dumfries and Galloway — and places sustainability at the core.

Local authorities have a crucial role in making this work. By aligning planning, transport and community engagement with the strategy, councils can spread demand more evenly, support businesses beyond the main tourist hubs, and ensure tourism strengthens communities rather than straining them.

Scotland’s visitor economy will always be central to its identity, but its long-term success depends on whether local people feel the benefits. By using tools such as licensing powers and visitor levies, and by directing investment where it is most needed, local authorities can ensure tourism is seen as a shared success. In this way, Scotland can remain a destination that welcomes the world while sustaining the communities that make it unique.

Amy Entwistle is a Partner in the Public Sector team at MFMac