Exploring Global Tourism Taxes: Current Trends and Future Prospects

The views expressed in this commentary are solely those of the writer. CNN is showcasing the work of The Conversation, a collaboration between journalists and academics to provide news analysis and commentary. The content is produced solely by The Conversation.

In April 2024, Venice started a controversial experiment by charging day trippers €5 ($5.40) to visit the city on some of the busiest days of the year. This move was made in response to the city's 30 million annual visitors. And it's not just Venice that is considering new tourism taxes.

A council in Kent, UK, has suggested implementing a tourism tax on overnight stays in the county. Similarly, visitors to Edinburgh may have to pay a fee by 2026, and the Welsh government is also planning to introduce a similar tax later this year.

Around the world, there are more than 60 destinations that already have this type of tax in place. These range from a nationwide tax in Iceland to various towns in the US. While some countries like France have had this tax since 1910, most places have only introduced it in the last decade or two.

Before the pandemic hit and put a pause on tourism, 2020 was called the "year of the tourist tax" by a newspaper. Amsterdam, along with cities like Paris, Malta, and Cancun, started charging visitors just for coming to the city.

The introduction of these tourist taxes has sparked controversy, with industry groups expressing worries about how it could affect the tourism industry.

The link between tourism levies and visitor numbers is not straightforward, as various studies have shown conflicting results. Some studies suggest that tourism levies have negatively impacted international tourism in places like the Balearics and the Maldives, and may discourage domestic tourism as well.

However, in Barcelona, one of the most popular tourist destinations with a tourism levy, visitor numbers have continued to increase steadily. The number of hotel guests has risen from 7.1 million in 2013 to 9.5 million in 2019.

The relationship between a visitor levy and tourist flow is quite complex, with different views even within the same country. Italy has been extensively studied, but the results are inconsistent.

One study focused on three neighbouring Italian seaside spots revealed that only one destination saw a decrease in tourist flow due to the visitor levy. Another study on the cities of Rome, Florence, and Padua showed that there were no negative effects on domestic or international demand in these cities.

The impact of tourism taxes on visitor numbers is uncertain. However, there are other effects to consider, such as the potential advantages of using the revenue generated. In a recent research study, we examined seven destinations that implement tourist taxes to see how the funds are allocated.

Tourism tax revenues in many areas are typically used to support marketing and branding efforts to attract more tourists. Additionally, the funds are often allocated towards improving tourism infrastructure, such as building public toilets, walking or cycling paths, and even large-scale projects like a convention center in Orange County, Florida.

Tickets are checked in Venice, Italy, during its world-first experiment to introduce an entry fee for day-trippers.

Tickets are checked in Venice, Italy, during its world-first experiment to introduce an entry fee for day-trippers.

Andrea Merola/Bloomberg/Getty Images

In the Balearics, the focus is on using revenues to support projects that help lessen the negative effects of tourism on the environment, culture, and society of the islands. These projects include waste management, conservation of natural habitats and historical sites, and providing social housing.

Overall, tourism taxes have been effectively put into place in the destinations we reviewed, with little indication of tourists being discouraged from visiting.

Research has shown that tourists are more likely to accept and pay a levy when they are informed about how the funds will be used to improve their experience or support sustainable tourism efforts. This applies to day trippers as well.

Many tourism destinations struggle with the issue of day visitors who use local resources without making a significant financial contribution. To address this problem, some places are considering implementing taxes to discourage day visits and promote longer stays.

Leading the way in this initiative is Venice. In April 2024, following extensive discussions involving local authorities, residents, and business owners, Venice began a trial of a day visitor tax, also known as an "access fee."

Back in Kent, it may take longer for any radical plans to be put into action. Unlike Scotland and Wales, there are currently no national plans in England to set up tourist taxes.

This lack of action may not be the best decision, considering the urgent need for many destinations in England to enhance local infrastructure that tourists depend on, such as clean bathing water and public transport. In Manchester and Liverpool, businesses have chosen to introduce optional overnight charges for visitors since there is no legal basis for mandatory fees.

Many other towns and cities may also start implementing tourism taxes in the future. It's something that we may need to factor into our travel budgets for wherever we decide to go.

Rhys ap Gwilym, a senior lecturer in economics, and Linda Osti, a senior lecturer in tourism management, both work at Bangor University. Ap Gwilym's research is funded by the Welsh Government, focusing on various devolved taxes, including the proposed visitor levy. Similarly, Osti's research is also funded by the Welsh Government, focusing on the proposed visitor levy.

Editor's P/S:

The implementation of tourism taxes has sparked a debate, with concerns raised about their impact on the industry. However, research suggests that the link between visitor levies and tourism numbers is not straightforward. While some studies indicate a negative impact, others show no significant decline.

It's essential to consider the benefits of tourism taxes. The revenue generated can be allocated to support marketing, improve infrastructure, and lessen the environmental and societal impacts of tourism. In Venice, for example, the day visitor tax aims to manage overcrowding and preserve the city's cultural heritage. In the Balearics, funds are used for waste management, habitat conservation, and social housing. By ensuring that tourists contribute to the upkeep of destinations, tourism taxes can help ensure their long-term sustainability.