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Many destinations are raising tourist taxes, but are they accomplishing their goal?

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Many destinations are raising tourist taxes, but are they accomplishing their goal?

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  • Tourist taxes are becoming increasingly common worldwide as a means to address overtourism and fund sustainable tourism practices.
  • While the effectiveness of these taxes in combating climate change is still being debated, their growing popularity reflects a greater awareness of the need for sustainable tourism.

Climate change is drastically impacting the world around us, including the way people travel and the destinations themselves. “Green Travel” is a seven-part series delving into how climate change is transforming the landscape of travel.

Travelers eager to explore ancient ruins and relax on beaches with some of the bluest waters in the world will now face a new tax in Greece. Unlike a visa fee or general excise tax, this charge is specifically aimed at addressing climate change. 

Earlier this year, the Mediterranean country announced it was introducing a new accommodations tax called the “resilience fee for the climate crisis,” only to be applied during peak travel season of March through October. When in effect, it nearly doubles the former accommodations tax. 

The tax will be paid upon check-in, with the amount varying based on the chosen level of accommodation, ranging from 1.50 euros (about $1.64) per night for apartments and one- and two-star hotels to 10 euros (about $10.96) a night for five-star hotels.  

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With travel to Greece at a high this past summer, the new tax is expected to bring in around 300 million euros (about $329 million) in revenue this year. That money will fund reconstruction efforts following last year’s heatwave, deadly forest fires and extreme flooding – the worst on record. It is also expected to contribute to other environmental initiatives related to climate resiliency. 

Greece’s new tax is one of many tourism levies popping up worldwide to tackle climate change and overtourism. The taxes put the onus on visitors to help protect the very destinations they enjoy. As sustainable destination management becomes more critical for many places, travelers should expect that these fees are here to stay. 

“Many cities are recognizing the need for sustainable tourism practices, leading to higher taxes to fund necessary initiatives,” said Anna Abelson, a professor on sustainability and tourism at NYU School of Professional Studies’ Tisch Institute of Hospitality. 

Here’s everything travelers should know about tourist taxes.

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What are tourist taxes, and why are they becoming more popular? 

For the last 20 years, all destinations worldwide have charged some kind of tax on tourists, according to Abelson. Most of the funds were allocated toward addressing the economic impacts of tourism, but the aim has shifted toward destination management as these places feel strained

Greece, New Zealand, Bali, Amsterdam, Venice and Iceland are just some places that upped or introduced a tourist tax in 2024 alone. Earlier this year, Hawaii proposed a $25 climate tax to be paid by the 9.5 million annual visitors. If passed, it would’ve been the first U.S. state to have such a tax. Estimated to have made $68 million a year in revenue, the tax would’ve funded reef restoration, green infrastructure and wildfire and flood prevention. 

These fees can have a few goals: to decrease the number of tourists, discourage short visits so travelers spend more in the local economy, or are a funding mechanism for various initiatives, according to Chris Imbsen, Vice President of Sustainability and Research for the World Travel & Tourism Council. 

Conversely, the fees could also disproportionately price out lower-income travelers. Since 2022, Bhutan has charged travelers a hefty “sustainable development fee” of $200 per person daily. On Sept. 10, the Galapagos Islands, regarded for teeming with wildlife, doubled its $100 entrance fee to $200 per person for up to 50 days of travel –  the first price hike in 26 years. 

“To us, the fee increase reflects the positive commitment shown by the Ecuadorian government for long-term conservation of the Galápagos Islands,” Paulina Burbano de Lara, CEO of Metropolitan Touring, which offers land-based and cruise explorations of the Galápagos, said in a news release. “We see it as a commitment to safeguarding the fragile, singular ecosystem of the islands to benefit future generations.” 

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How do travelers pay tourist taxes? 

Typically managed by local or national governments, these taxes are collected in various ways, like at hotels or entry or exit points at airports or ports. 

  • After being suspended during the pandemic, Iceland reinstated its tourist tax at the beginning of this year to charge ISK 600 (about $4.42) for hotel guests and ISK 1,000 (about $7.36) for cruise passengers. 
  • On Feb. 14, Bali began charging foreign travelers 150,000 rupiahs (about $9.56) that could be paid in advance of their trip or at airport immigration. 
  • Amsterdam upped its tourist tax to 21.80 euros (about $23.88) for hotel guests and 11 euros ($12.05) per person per day for cruise passengers.  
  • Venice made news when it trialed a fee of 5 euros (about $5.48) for day-trippers on peak summer days. Travelers had to “reserve” a slot online and show a QR code if stopped by officials. In July, the lagoon city announced it would renew the fee and up the price in 2025. 

Where is the money going? 

For the most part – like in Bali and Iceland – the tax revenue is said to fund initiatives along the lines of environmental protection and conservation, cultural heritage preservation and infrastructure improvements, Abelson said.  

These efforts likely resonate with 71% of travelers hoping to “leave the places they visit better than when they arrived,” as the Booking.com 2024 Sustainable Travel Research Report found. 

For some, like New Zealand, which publishes annual reports on its IVL’s funding allocations, it’s easy to track exactly where the revenue is going – critically endangered bird recovery and capacity-building for conservation law enforcement. For others, it’s not so clear-cut. 

“Transparency in how funds are allocated can enhance trust and encourage responsible tourism behaviors,” said Abelson. “Once travelers understand the transparency in reporting how tax revenue is used, it could encourage their support and participation.”

For example, Mallorca introduced a Sustainable Tourism Tax in 2016 of a few euros per night for all overnight stays in tourist accommodations, saying the revenue would go toward initiatives such as investing in sustainable tourism jobs and funding scientific research projects related to climate change. However, Imbsen said finding the specifics and any reports on successes from the tax are inaccessible or at least very difficult to find.  

Regardless of whether travelers can find out about the tax status they paid, these fees are not going away. In fact, as weather gets more severe and sea levels continue to rise, we can expect to pay even more to travel. “Prices are likely to rise to address environmental degradation,” Imbsen said.  

Are they effective? 

That’s the big question. “When it comes to their effectiveness, the jury is out,” Imbsen said. 

Abelson agrees, adding that it “depends on the outcome.” In some places, tourist tax revenue has been shown to fund several projects that benefit the community and environment. Italy’s Lake Como used the 348,000 euros (about $383,931) of tourist tax revenue from the first six months of 2024 to finance the city’s organic waste collection, lakeshore maintenance and the restoration of frescoes in the historic center. 

In other cases, the tax was considered not as successful. This past summer, Venice’s attempt to limit tourist numbers by implementing a nominal fee equivalent to the price of a cappuccino did little to discourage many travelers. The fee has been considered “a failure” by locals who didn’t notice a significant difference in the hordes of tourists. 

Part of that may just be the newness of the concept. “Many destinations have yet to establish the appropriate pricing strategies that could truly make a difference,” Abelson said.  

However, when addressing an issue as vast as climate change, the effectiveness of these taxes is far from straightforward, according to Marta Soligo, a professor and director of tourism research at the University of Nevada, Las Vegas Office of Economic Development.   

“If we talk about climate change and overtourism, this is a global phenomenon, and a tourist tax can be considered a so-called Band-Aid,” she said. Venice, a UNESCO World Heritage site, has been hit with flooding in recent years and is at risk of sinking. 

To her, the question of climate change impacts should be posed to local communities, tuning into indigenous knowledge of land management or imposing taxes onto bigger companies, like “the polluters.” 

Although it’s not definitive if tourist taxes can significantly mitigate the impacts of climate change and mass tourism – the most harmful type of travel, according to Soligo – the fact that they are becoming more prevalent is a step in the right direction.  

“Thinking of global warming and over tourism, 10 years ago, you didn’t see many policies on this topic, so it’s good we are thinking and talking about it now.” 

Contributing: Josh Rivera, USA TODAY 

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