Taxes on overtourism, a beneficial or punitive solution?

After the lifting of the Covid-19 restrictions in many countries, there has been a surge in the rate of tourism globally. This has led some countries such as Scotland, Ireland, and Austria to try to find a way to stem the tide of overtourism. One such way is the introduction of tourism taxes, which the authorities believe will help limit the rate of people moving into their country for tourism.

However, this tactic of tourism taxes is believed by many to be two-edged. Let’s look at what over-tourism taxes mean and if it has any impact on global tourism.

What is a tourism tax?

Tourism taxes are referred to as fees or levies which are directly or indirectly imposed via hotels, resorts, or other luxury travel companies. This levy is aimed at impulsive and overnight travelers for several reasons. Many European cities such as Venice, Amsterdam, and Edinburgh have recently imposed a tourism tax to counter the impacts of the huge volumes of tourism. Countries such as France, Canada, and Norway are tickled with the idea of imposing some form of over-tourism tax or other.

Moreover, many residents over the years have complained about the ill effects of overcrowding in their cities. The noises and pollution that comes from tourists and travelers have started to get on the nerves of residents. These people are saying their normal lives have been affected by the crowd who come yearly to their location.

How does the overtourism tax work?

Imposing overtourism taxes is a simple process because of the flexibility that comes with adjusting several rates. Also, these taxes come with some merits for the authorities. Local authorities in some European cities believe this is the easiest way to solve some problems.

Cruise companies have been blamed for overcrowding because of the various travelers who want a ride. It’s only approximate that cruise riders pay a form of tax to the authorities.

Different types of Tourism taxes available

Depending on the government authorities imposing the levy, here are some types of taxes in the Tourism sector:

Hotel Tax

Some major cities in Europe charge hotel taxes per day. A good example is Hamburg whose over-tourism tax is called Kulturforderagabe. This means room tax or bed tax. However, some areas are exempted from this tax as it was only imposed on overcrowded municipalities. Spain and Greece cities also charge some form of tourism tax since 2018 which ranges from 1 to 4 euros.

Restaurant taxes

Many cities in Europe also impose some form of tourism tax which is leveled on foods and drinks. This type of tax is imposed on bars and restaurants that have a high number of foreigners patronizing them.

Arrival Tax

New Zealand in 2019 planned on imposing a $35 arrival tax on travelers from outside the Pacific Coast. This was expected to raise about NZ$82 million yearly and reduce tourists by 15%. Moreover, Venice also introduces a 15 euros entrance levy in 2019 for everyone visiting the city.

Departure Tax

Many islands and Caribbean nations charge a departure level on all tourists. The Bahamas charges about $16 while Antigua and Barbuda collects around $50. These fees are integrated into the flight fees so you won’t even know you have been taxed.

In 2020, Japan charged a sayonara tax which is about 1,000 yen to visit and leave the nation. The money saved from these levies was used to support the Tokyo 2020 Olympics.

Can Taxes help curb overtourism?

Yes, in some ways, these taxes can help fight over-tourism, but to an extent. The impact of taxes on over-tourism depends on the visitors and economic concerns.

Venice for instance has about 88% of visitors who are known as day trippers from nearby areas. These people cause overcrowding, however, spend little time and cause a nuisance.

One of the benefits of these taxes is that it is hoped to reduce these low lifers and bring sanitation to these areas. When you impose levies on hotels, resorts, and other luxury places, only serious people will come. The increase in rates is expected to discourage unserious visitors to these places.

Moreover, an overtourism tax is expected to go a long way to help the immediate community which is affected. For residents of beaches, water springs, mountains, and caves, these taxes can help build roads and hospitals to help residents. It is also hoped that some of these taxes will be used to clean up the area for the population and provide several scholarship schemes for indigenes of the area.

However, the overtourism tax comes with some drawbacks which can be counter-effective. When you impose too much tax on tourism, it is possible to discourage willing tourists who want to have a feel of the area.

Most travelers in 2022 prefer visiting places with an affordable standard of living. However, when you place some levies which will increase the prices, they will go to other places. There are many cities in Africa, Asia, and Oceania which are attracting more travel influencers.

When introducing an overtourism tax, there should be a balance among the authorities. While it can be beneficial to the immediate community and government, it can also scare away potential investors and influencers from visiting the countries.

 

Why do major hotel groups continue to make collaborations with influencers? Read our article to know more about it!

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