Tourist tax

Tourist taxes are generally a way for governments to generate revenue for the consolidated fund but can also be a hypothecated levy used to address the impacts of tourism.

[6] In most countries the tax is levied by municipal, regional or national governments and is usually collected at the point of check-in or, in some cases, as part of the booking process.

In Paris a fixed fee for the duration of the stay is charges which varies depending on the star rating of the accommodation.

[3][8][9] Arrival taxes are paid by incoming visitors to a country and are collected either on entry or pre-arrival as part of the visa application process.

[14] Similarly, in Korea an additional bath tax [ko] is levied against users of hot springs.

[16] New Zealand's NZ$35 Visitor Conservation and Tourism Levy, Bhutan's Sustainable Development Fee, Greece's Resilience Fee for the Climate Crisis and Bali's tourist tax are all examples of tourist taxes that are ring-fenced for sustainability initiatives.

For example, Lake Como used €350,000 from its hotel tax income to fund the city’s organic waste collection and improve their lakeshore maintenance programme.

The Tax for Sustainable Tourism is specifically hypothecated managed by a special government commission for water infrastructure, cultural restoration and environmental preservation.

[14] They also took the decision in 2024 to use a portion of their tourist tax income to diversify their economy and reduce their dependency on tourism industry.

[3][21][22][23] The tourism industry is susceptible to high Price elasticity meaning that small changes to tourist tax have a large impact on the demand for a particular destination when considered independently.

[14] When tourist taxes have been reduced to incentive tourism the impact was minimal in Portugal, where vendors only passed through 25% of the intended saving, compared to Finland which saw a large boost to their tourism industry when 100% of the VAT savings were passed through to consumers.

Ninety percent of respondents confirmed they would be happy to pay between £2 and £10 per night if proceeds were ringfenced to support local conservation projects.

[32] A report by UN Tourism found that, when not implemented correctly, tourist taxes can have negative and unintended consequences.