Tourist taxes: 4 in 5 loveMONEY readers say they’re a rip-off

Tourist taxes have been hiked in Majorca and Greece and have split loveMONEY readers. Are they unfair, or is it time for tourists to pay their share?

We’re all used to baggage costs, car hire extras and other rip-off expenses when we go on holiday.

But what we don’t expect, when we finally get to our pre-booked hotel, is to be charged even more.

It’s therefore not entirely surprising that 80% of loveMONEY readers (at the time of writing) say tourist taxes are a rip-off, compared to just 20% who believe they’re needed to pay for the problems caused by tourists.

As we revealed last week, tourist taxes have either been introduced or hiked in several of the most popular summer holiday destinations.

For example, the Balearic Islands, which include Majorca, has doubled its tourist tax, whilst Greece has brought one in for the first time this year.

The article triggered a lot of debate in the comments section, with readers arguing both for and against the tax (although most belonged to the latter camp).

Cheapest ways to send money abroad

Are tourist taxes self-defeating?

As some pointed out, there’s a very simple way to avoid a country’s tourist tax: don’t go there.

It’s too late, of course, if you’ve already booked trips, but an argument made by tourism industry is that tourists will desert countries that hike up their tourist tax.

As regular reader Lawrence A argued:

"If the tourism tax starts to deter visitors, it will be self-defeating, especially in places which rely heavily on tourist income to keep the economy alive. It's pure greed."

It's a relevant point – many people do tend to vote with their feet when faced with higher charges.

However, it should be noted this hasn't been the case with Greece so far. The country is predicted to welcome 32 million visitors this year – a record – despite introducing taxes.

Of course, it’s possible these numbers might be even higher without the levy.

We'll have to wait a year at least to get a more accurate reading on how it has influenced holidaymakers.

Reducing tourist tax needn’t mean not going on holiday – in many places you can reduce tourist tax by staying in... less salubrious hotels or rental apartments.

Plus, if you stay with friends or family you won’t have to pay any tourist tax.

If you want to factor tourist taxes into your budget, we’ve listed them here.

While we're on the subject of budgeting, make sure you pay the lowest-possible price your flight and avoid rip-off fees once you get there.

Tourist taxes need to be better explained

The purpose of tourist taxes are rarely explained, although the general case for them was summarised by reader RMN05:

"It does, after all, ensure that infrastructure and public service costs are not borne solely by the local residents."

Over-tourism has become a huge problem in Europe, with Venice segregating tourists and locals over the May Day weekend.

Some 200,000 visitors were projected to descend on the city, dwarfing the resident (tax-paying) population of 50,000.

With just 20% of readers believing in the necessity of tourist taxes, it seems Governments have a lot more work to do in convincing the public.

An encouraging start was made by the Balearic Islands, which have published leaflets, in English, detailing where the money from increased tourist taxes is going. Projects include the recovery of elm groves, protecting seagrass and preserving sand dunes.

However, it's unclear why these projects couldn't be paid for by local governments out of their usual tax revenues, as reader Lawrence A argued:

"Europe, especially the Mediterranean resorts and the islands, make unimaginable amounts of money from tourism. There is absolutely no need to stick an additional tax on top."

The UK and the big VAT question

Reader Basia02a asked why the UK doesn’t charge tourist taxes:

"Unlike most of these countries we have free entry to museums and galleries etc as well, so we should either charge tourists for this or have a high tax. It is also a bit rich as it is not part of the cost of booking the holiday – it should be included in the hotel rate for a fair comparison."

The UK doesn’t currently charge tourist taxes, although Bath has recently considered adding a pound per night to hotel bills.

That said, the UK more than makes up for its lack of tourist taxes with its high 20% VAT on hotels.

In much of Europe, hotels received a VAT discount, which is frequently larger than the tourist taxes they levy.

In Greece, for example, hotels pay a 13% reduced rate, compared to the 24% VAT locals pay on most items. The 11% saving is likely to end up larger than the maximum €4 a night in tourist taxes.

We don’t usually notice VAT because it’s integrated into prices, and as Basia02a argues, perhaps it’s time to include tourist taxes in hotel rates, ending uncomfortable surprises for travellers.

Alternately, governments could abolish tourist taxes, and then raise VAT on hotels to pay for the problems tourists cause.

What do you think? Have any of the above points changed your mind? Share your thoughts and vote in our follow-up poll below.