Destinations Funding Sustainability Through Tourist Taxes

Destinations Funding Sustainability Through Tourist Taxes

The beach in Palma de Mallorca, Balearic Islands, Spain. (photo via CJ_Romas/iStock/Getty Images Plus)

Article written by Melissa Novotny, Operations Manager and Sustainable Tourism Consultant at Sea Going Green.

If you have traveled in the past few years, you may have noticed a small tourist tax added to your bill upon booking or when checking into your hotel. Though tourist fees are often negligible, totaling on average only a few dollars per night, these types of fees are considered by destinations and accommodations to be one of the easiest ways for globetrotters to give back to the places they visit.

Grappling with the impacts of overtourism pre-pandemic, destinations like Amsterdam, Venice and Barcelona were some of the first to introduce these types of taxes to redistribute profits back into communities and offset costs for the maintenance of public facilities. With reopening in full swing, the use of these taxes has shifted towards building back better.

Funds are now being used to support the upkeep of sustainable tourism infrastructure, conservation projects and other plans to improve the “eco-friendliness” of hotspots. Although these taxes aim to support destinations with their sustainable development, transparency is needed to gain consumer (and industry) trust so that destinations continue to adopt them. With this in mind, let’s dive into how the following destinations have turned contributions from tourist taxes into valuable sustainable tourism initiatives.

Balearic Islands, Spain

The Balearic Islands, an archipelago of established tourism destinations, Ibiza and Majorca, are situated just east of mainland Spain’s Mediterranean coast. Known for their azure waters, best-in-show nightlife and stunning cliffside villages, these Balearic islands are one of the most trodden summer destinations, drawing in hordes of European travelers each year.

To shift the islands’ focus toward preserving biodiversity and cultural heritage, the Committee for Sustainable Tourism was created to select and fund projects using the profit generated by the tourist tax of 1-4 euro (approx. US $1-4.40) per day depending on the type of accommodation and duration of stay. To date, the tax has been put towards supporting windmill owners in Majorca, a heritage asset and the renovation of tourism infrastructure at UNESCO World Heritage site, Tramuntana mountain range.

New Zealand

Another, albeit less tropical, island that is supporting environmental development through tourism spending is New Zealand. Upon arrival, visitors pay a NZ $35 fee (approx. US $24), otherwise known as the “International Visitor Conservation and Tourism Levy” (IVL). This mandatory tax applicable to all foreign visitors was introduced in 2019 and has since been used for the conservation of natural tourist attractions and surrounding amenities. Conservation research and development projects have been awarded over NZ $3 million (approx. US $2.08 million) to protect some of the country’s most beautiful tourist destinations, Milford Sound and Cook National Park.

Destinations Funding Sustainability Through Tourist Taxes

Marlborough Sounds, New Zealand. (photo via Rob Suisted)

Amsterdam, The Netherlands

This “biker’s paradise” renowned for its tulips, windmills and free spirits saw as many as 20 million tourist arrivals in 2019, outnumbering its just under a million local residents. A victim of its own success, Amsterdam was considered to be one of the most well-known cases of overtourism, while being one of the most vulnerable cities to climate change.

To combat the effects of overtourism and reap the benefits of its successful tourism industry, the Dutch government introduced a tourist tax of seven percent on hotel stays with an additional fee of €3 (approx. US $3.30) added per person per night; a day fee of €8 (US $8.90) would also be charged to cruise passengers. Funds from the tax have been allocated to the sustainability and longevity of Amsterdam’s famous canals and bridges, which require intensive maintenance to ward off the pressure from wear and tear, not to mention global warming-induced rising tides.

Thailand

As one of the most visited destinations on earth, Thailand continuously brings in a wide variety of tourists from backpackers to luxury tourists who come to enjoy the country’s vibrant cities, jungle escapes and idyllic beach fronts. To capitalize on this, Thailand’s Center for Economic Situation Administration set in motion a “tourism transformation fund”, subsidized by a 500-Thai baht (around US $15) tourist tax collected per visitor. The funds on top of destination-specific tourist fees will support the country’s restructuring from mass tourism to sustainable tourism, aiding in conservation development projects to the likes of the Maya Beach (Koh Phi Phi Leh) makeover, which facilitated a revival project to re-open the highly touristic island sustainably after closing in 2018 following the impacts of overtourism.

Destinations Funding Sustainability Through Tourist Taxes

Views of the Gulf of Thailand from the Renaissance Pattaya Resort & Spa (photo by Janeen Christoff)

Quintana Roo, México

Home to some of the world’s first “Sustainable Tourism Zones”, Quintana Roo province includes the cities of Cancun, Playa Del Carmen, as well as Cozumel and other popular all-inclusive resort and cruise destinations on the Gulf of Mexico. Since April 2021, a tourist tax of $224 Mexican pesos (US $10-11) has been collected electronically from visitors arriving by plane or cruise ship. The tourist tax was brought forward by the governor of Quintana Roo and supported by representatives from tourism organizations like the Cancun Hotel Association to bring in additional endowments for social development and biodiversity support to Mexico’s diving and snorkeling attraction, the mesoamerican reef.

How much tourist tax would you be willing to spend if you know it would go towards a destination and its residents? Let us know in the comments below.

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