Venice tests the water with new tourist tax


Simon Calder
Wednesday 24 August 2011 00:00 BST

Visitors to Venice will find an unexpected charge on their hotel bills from tonight as the city becomes the latest destination to launch a tourist tax.

Anyone lodging overnight on the islands in the Venetian lagoon, or even in the dreary suburbs of Mestre on the mainland, will pay an imposta di soggiorno that adds as much as €10 to bills for double or twin rooms.

Research by The Independent shows that authorities worldwide, from the Maldives to the Rockies, have begun to exploit what they see as a rich seam of earnings.

The Comune di Venezia has produced a lavish brochure in nine languages to announce the tourist tax, promising visitors "you will become one of the city's sponsors, contributing to safeguarding it". The levy even has an official logo – a sticker reading "Thank you for being a sponsor of the splendor of Venice".

The authorities say the levy, of up to €5 per person, "will help the city improve the quality of the tourist services". The tax will also be used for "salvaging the city's cultural and architectural heritage". But under Italian government rules, local authorities can also use tourist taxes to support public services – leading to suspicions that this is a thinly veiled plan to help to stem Italy's massive public deficit.

While the tax represents less than 1 per cent on the €1,023 room rate at the Hotel Cipriani, guests in a typical three-star hotel costing €150 will pay €6 – an increase of 4 per cent.

Evidence from elsewhere in the world suggests that destinations with a genuine claim to be unique can raise taxes with impunity. At the start of 2011, the Maldives introduced a "Tourism Goods and Services Tax" of 3.5 per cent, a levy that will soon almost double after it met little resistance among visitors to the Indian Ocean archipelago.

Tourist taxes are popular with finance ministers because the people who pay them do not, by definition, vote. Local authorities are also latching on to the idea that some of the financial burden for public services can be shifted to non-residents.

But some in the travel industry view tourist taxes as damaging in the long term if tourists perceive they are being ripped off to pay for public-sector extravagance. "Any tax on tourism is unwelcome," said a spokesman for Abta, the travel association.

Visitors to Britain are not immune: they pay VAT at the standard rate of 20 per cent on hotel stays and most other spending. If they fly home from the UK, they are liable for Air Passenger Duty between £12 and £170, depending on destination and class of travel.

Tourist tax hotspots

The Maldives

At the start of 2011 the Maldives brought in a 'Tourism Goods and Services Tax' of 3.5 per cent, payable by anyone on the islands who doesn't hold a residence permit. The tax will rise to 6 per cent from the start of next year.

New York City

Visitors to the US must now pay $14 for an electronic permit to enter America, designed to raise funds for tourist promotion. New York City's astronomical hotel rates are inflated by 14.75 per cent by taxes plus a flat fee of $3.50 per night.

Aspen, Colorado

This year the upmarket US ski resort of Aspen added a 'Tourism Promotion Tax' of 1 per cent on the existing 12 per cent in local sales taxes.

Vancouver, Canada

The city of Vancouver has imposed a 'Destination Marketing Fee' of 1.5 per cent on top of an existing 2 per cent hotel tax and a 12 per cent salestax.

Delhi, India

Guests at hotels in Delhi must pay 12.5 per cent "luxury tax" on hotel stays – though this can be avoided by choosing one of the less salubrious rooms in the Indian capital costing less than 500 rupees (£6.70) a night.

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