Amsterdam will miss out on hundreds of millions of euros if it continues to increase tourist taxes. Where the municipal treasury is stretched, hotels, cafes, restaurants, shops, attractions and public transport pay the price. And with that also the people of Amsterdam.
Herman Stil28 september 2023, 20:20
After a series of previous increases, the Amsterdam municipal council wants to increase the amount that hotel visitors pay per overnight stay to 12.5 percent of the room rate from January 1. This means that the municipality is expected to generate 65 million euros in additional income.
In addition, the tax increase would result in 600,000 fewer hotel nights being booked annually, according to a report by research agency Significant Ape that was drawn up on behalf of the municipality. Since tourists stay in Amsterdam for an average of two nights, this amounts to approximately 300,000 visitors.
According to Statistics Netherlands, 22.2 million visitors – including 10.2 million overnight tourists – spent 12.5 billion euros in Amsterdam in 2019. This amounts to an average of 563 euros per person. This means that in the council’s proposal, urban activity would miss out on almost 169 million euros in income if 300,000 tourists were to stay away because of the higher tourist tax.
Fixed limit
That decrease is not nearly enough to curb the crowds in the city. Under pressure from the municipal council, the previous council set the limit at 18 million overnight stays annually. This year that number is expected to be more than 23 million.
To reduce the number of overnight stays to the agreed limit, the tourist tax would have to rise to 45 percent of the room price. This means that 85 euros in tourist tax must be added to the current average price of a hotel stay (189 euros).
To stay within the limit of 18 million overnight stays, a reduction of 5.6 million overnight stays is required. That means 2.8 million fewer overnight tourists in the city. The accommodation sector, catering and facilities would therefore miss out on almost 1.6 billion euros in income.
According to Significant Ape research, half of those who stay away will choose a hotel outside Amsterdam – where the tourist tax is much lower – and then visit the city as a day visitor. That is 1.4 million visitors who do not bring any value to the municipality at all. However, they do contribute something to the Amsterdam economy.
Doubling
Stef Driessen, economist at ABN Amro, has serious doubts about the expectation that the increase in the tourist tax will lead to fewer visitors. He refers to the 2020 increase, which has not been able to prevent the number of overnight stays from growing from 18.6 million to the current more than 23 million.
“If the council’s plan is implemented, it will mean that the absolute rate of tourist tax has doubled since 2016,” says Driessen. “This time too it will appear that it has no effect on the number of visitors. And what will happen in a year’s time when that comes true: will the rate increase even further?”
According to him, only exorbitant increases, as the council is now proposing, will have an effect on the number of tourists. “There is a limit to what you can ask for. If millions of tourists stay away, this will have major consequences for facilities such as shops, restaurants, museums and public transport. And therefore also for employment and quality of life.”
These effects are further reinforced because the extra proceeds from the higher levy invariably disappear into the municipal coffers and do not directly benefit from crowding or quality of life measures.
Congresgangers
If increases are a deterrent, according to Driessen they do not affect the groups that the city wants to keep out – such as backpacker holidaymakers, drink and smoke tourists or bachelor partygoers – but rather visitors who contribute relatively much to the capital’s economy. “An increase will hit the business market first, which does not occur in July and August when the crowds are at their greatest.”
“For a business tourist, an extra 30 euros for a stay may not be a problem, but for a conference with 38,000 visitors it adds up immediately. Other cities in Europe do not charge tourist tax at all for conferences, a much lower amount or offer free public transport.”
According to him, the municipality is threatening to kill the goose that lays the golden eggs. “A conference goer spends an average of 1,131 euros during his stay, business visitors spend 633 euros and tourists more than 200 euros.”
Cigar and dairy cow
The trade association Horeca Nederland is disappointed and regrets that the municipal council is not interested in alternatives to curb the crowds and nuisance. “We have come up with all kinds of alternatives,” says Eveline Doornhegge. “Economics councilor Sofyan Mbarki has previously presented good plans, but they are not being implemented. The only button the council turns is the tourist tax, while it has been shown time and time again that this does not work as a crowding measure. We want to continue talking, also with the city council, but hoteliers are extremely angry that they are once again being the target and are always being used as a cash cow.”
The call for action is getting stronger. “We have explored what legal options there are to challenge the increase in the tourist tax. It turns out there are.”
Day trippers
The trade association’s priority is that the pain is distributed among all groups that cause crowds and nuisance. “The municipality can no longer ignore measures that ensure that day visitors also contribute. That group has always been larger than the number of overnight tourists and is only growing further. They just don’t pay anything for using the city.”
According to economist Driessen, there are certainly options for getting day trippers to pay. “You can charge people via the GVB and NS check-in gates – something like NS now wants with the rush hour surcharge – and with a surcharge on parking fees. You can then exclude Amsterdam residents by identifying themselves with a public transport chip card and a bank card.”
Proposals to differentiate the amount of tourist tax – such as a higher levy in the busy city center or a lower levy for lucrative conference goers – also do not seem to be on the agenda of the municipality. Driessen: “You can also choose to charge more at peak times. For example on Saturdays or in the summer.”
2023-09-28 18:20:29
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