The Rise of the Tourist Tax – How Did it Start and Which Places Charge the Most?

by Emma Featherstone, The Telegraph, November 6, 2019

Would you be happy forking out an extra £15 per person for a beach holiday in Mexico? From November 9, the country’s Baja California Sur state will be the latest destination to impose a levy on its visitors ($18.50 each). Popular resort cities including Cabo San Lucas, San Jose del Cabo and La Paz will be affected. 

While other Mexican cities charge tourists indirectly through taxes on hotels or airport use, this charge will be made directly and payable at airport kiosks. The state government said money made from the tax “will be applied in programs, works and actions of high social impact”.

Mass tourism is on the rise, with international arrivals reaching 1.4 billion in 2018, and visitor levies are often billed as a way to ease the effects of overtourism.

These charges might deter some travellers. However, the clearer benefit is that they raise funds that can be invested in infrastructure or the environment. In the last two years, more destinations have introduced official tourist taxes, or increased existing levies.

At least 40 countries now charge some form of tourist tax, including a number of European cities and US states. Meanwhile, a review by the European Tourism Association (ETOA) found that in Europe a tourist charge was in place in 125 destinations across 26 countries.

The cost of overtourism

Perhaps the most obvious motivation for the increase in tourist taxes is overtourism. Cheap flights, the rising popularity of cruises and a growing, global middle class (not to mention the advent of social media) are among the factors fuelling our appetite for travel - and the growing attempts to discourage it. A tick-list approach sees tourist hordes inundating a select group of picturesque cities, monuments and beaches. Take the old town of Dubrovnik. At the height of summer it can host 2,000 overnight guests and 8,000 visitors every day. Annual arrivals from overseas visitors to the city grew from 1.3 million in 1995 to 16.6 million in 2018.

Jane Foster, Telegraph Travel’s Dubrovnik expert, reported on the situation this summer. She spoke to Dubrovnik representative Petra Marčinko. Marčinko told her: "Dubrovnik was built for the needs of 40,000 inhabitants, not 4 million overnight visitors, such as we have each year, plus one million cruise ship passengers and day-trippers. For decades, there has been no development of public infrastructure, although visitor numbers have grown."

Supporters of tourist taxes may think it right that international visitors to Croatia have been asked to provide some compensation. They are levied with a fee of 10 kuna (around £1.15) per person, per night. This is the charge on all accommodation except campsites, where the fee is 8 kuna. While this charge helps to raise money for the government, it can't be seen as a real deterrent for the tourist masses. A couple staying in the country for seven nights would only pay an additional £16.10.

In 2018 a 25 per cent increase on Croatia's tourist tax, effective from 2019, was annouced. Gari Cappelli, the country’s tourism minister and president of the Croatian tourist board, said at the time that the money raised would be distributed to the Red Cross, the tourist board and destinations within the country.

A timeline of overtourism: key moments in global battle between locals and travellers 

The highest fees

Other destinations have taken a more decisive approach. Bhutan, for example, charges tourists a fee of $200 (£155) per day between December and February, which increases to $250 (£194) for the rest of the year. The Buddhist kingdom also caps tourist numbers in a bid to preserve its national identity.

A rich culture, a wealth of natural wonders, or a cominbation of the two – alongside a stable political situation – has brought an ever-increasing number of visitors to destinations such as Japan and New Zealand. Both countries brought in tourist taxes in 2019.

Since July 1 2019 an 'admission fee' of £19 is charged to overseas visitors to New Zealand (Australian citizens and citizens of some small Pacific nations are exempt). The nation is projected to host 4.5 million international visitors by 2022, up from 3.1 million in 2015.

In 2018, Telegraph Travel readers voted New Zealand as their favourite country for the sixth year in a row – it's unlikely the relatively modest tourist charge is going to put off British travellers. When the tax was announced, a statement on the government’s website said it was to ensure tourists “contribute to the infrastructure they use and help protect the natural environment they enjoy".

Japan saw a record 31.2 million vistors in 2018. In January (ahead of the Rugby World Cup and 2020 Olympics) it introduced a “sayonara tax”. Visitors pay 1,000 yen/£7.11 when leaving the country.

Preserving the environment

Bali could be the next popular destination to introduce a levy. Rising visitor numbers have led the Indonesian island to consider a tourist tax. In 2018, over 6.5 million people arrived at the island’s airports, an increase of more than 10 per cent on the number in 2017. With tourists putting a strain on local resources and a rising tide of plastic waste hitting beaches, the money raised through a tax could be put towards conservation.

The Jakarta Post reported in January that the Balianese administration had drafted a bylaw on tourist contributions to fund programs to preserve the environment and Balianese culture.

A number of Caribbean islands charge tourist taxes in some form. Among them is Barbados where new or increased taxes were reported to have added up to £200 to a family holiday. Fees were added to rooms – from $2.50 (£1.90) to $10 (£7.60) per room, per night, depending on the level of accommodation. Visitors are also subject to a 'airline travel and tourism development fee' of $70 (£53) when leaving Barbados.

Europe's highest levies

Alongside Croatia, a number of European countries, including specific cities and resorts, charge a tax to international visitors. Rome has the highest fixed charge of between €4 (£3.40) and €7 (£6) per person, per night. However, other cities, including Amsterdam and Budapest, apply a tax based on a percentage of accommodation costs.

How cruise holidays are on the rise

From January 2020, Amsterdam will use both approaches – together they mean the city could have the highest tourist tax in Europe. A £3 per person, per night charge will be added to the tax of 7 per cent of the price of a room per night. Airbnb guests will see an increased rate of 10 per cent per night.

For those who like to stay in relative luxury, Amsterdam already has the highest tax. An additional £21 per night is charged when staying in a £300-per-night room in Amsterdam, compared to the fixed £7 per night in Rome. The additional £3 will up the per night rate to £24 in Amsterdam.

Cruise passengers stopping in the city have also been hit with a €8 per person charge since January 2019 . The tax is placed on those staying in Amsterdam less than 24 hours. Cruise lines pay the cost, which is then passed onto customers.

Britain has yet to implement tourist taxes. However, this year Edinburgh became the first UK city to approve their introduction. A £2 per person, per night charge was pencilled in for next year. However, it may not come into force until 2021.

Venice is among the cities worst hit by overtourism but it is yet to enforce a tax on daytrippers who account for much of the tourist traffic over summer as cruise ships head for the floating city. Visitors staying overnight are already subject to a local city tax between €2 and €5, yet the implementation of a daytripper tax has been pushed back until January 2020.

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This article was written by Emma Featherstone from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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