The Municipality of Amsterdam has commissioned a study into the effects of an increase in the tourist tax. But are these the outcomes policymakers had hoped for? In the basic scenario, the tax must be increased from 10% to more than 40% of the overnight price in order to achieve sufficient shrinkage. And then the report also points to the additional effects…
The municipality of Amsterdam is using various policy measures to limit the nuisance caused by the growing number of tourists. One of those measures is to increase the tourist tax if the number of incoming tourists exceeds the signal value of 18 million.
The report concludes: “We conclude that an increase in the tourist tax has an inhibiting effect on the number of tourist overnight stays, but that effect is not very large. In the base scenario, a tourist tax of between 40 and 45% of the overnight price (excluding travel costs) is expected to be required to reduce the number of overnight stays to the signal value of 18 million. In the current situation, the tourist tax is approximately 10% of the overnight price.”
The report also discusses various additional consequences of the rising tourist tax:
- The leakage effect: Many tourists will look for a hotel room in the region, and then commute to Amsterdam. The immediate region has (still) room for an extra 2 million overnight stays per year.
- Amsterdam is becoming too expensive for budget tourists. Amsterdam remains accessible as a tourist destination only for tourists with a fat wallet.
- Many international conferences, especially those with less wealthy supporters, will eventually avoid Amsterdam.
- The tax revenue for the municipality of Amsterdam is increasing sharply. With an increase from the current 10% to 35%, tax revenue will increase from 175 million to 427 million (baseline scenario)
View the full report at: https://amsterdam.raadsinformatie.nl
KHN is against further increasing the tourist tax
Koninklijke Horeca Nederland (KHN) recently saw proposals to significantly increase the tourist tax in Amsterdam. There is currently a reaction against this: “KHN believes that you should focus on behavior during your stay, not on the money for general resources. If money is needed in addition to behavior, also focus on day visits. KHN will continue to convey this message in all consultations with the municipality.”
Background
The number of residence visits in 2023 and subsequent years appears to be above the signal value of the regulation of 18 million residence visits. 2019 million were realized in 18 and almost 2022 million in 16. The college must inform the city council again before June. If the number of stay visits is expected to exceed 20 million, the Board has 6 months to submit a policy memorandum that at least looks at:
- regulate holiday rentals of homes
- regulate (less) stay visits through tourist tax
- all other measures to reduce the number of residence visits to less than 20 million
The municipal executive must indicate the impact of measures over three years (2023-2025) with their effects on the municipal budget for those years.
The council must also look at the supervision of day visits and the tourist support of neighbourhoods. In 2019, the volume was 18 million visitors and it is likely that this number will be reached again in 2020 after the 2022-2023 corona dip. The entire capacity of our market is aimed at this and approved by the municipality, which now thinks it is too much.
KHN finds the focus on the number of tourist overnight stays far too one-sided.
More information: www.khn.nl