Central Amsterdam is a compact city, home to fewer than a million people. But its canals, museums and red-light district lure more than 20 million overnight visitors a year. Little wonder that the city’s signature sound is now wheelie suitcases rumbling over cobblestones.
In the past decade, residents of the Dutch capital have become fed up. So the municipality, which had long levied a hotel tax of 5pc, has gradually ratcheted it up to 12.5pc.
But now the gloves have come off: the rate will rise to a hefty 20pc by 2031. That’s on top of the national government raising VAT on a hotel stay from 9pc to 21pc. The tax on a visitor paying €150 (£130) for a room will soon top €60 a night.
Amsterdam’s hotel tax hasn’t yet deterred the visiting hordes. Last year the city again failed to bring the number below its targeted annual maximum of 20 million tourists.
But Pim Evers, the chairman of the Amsterdam branch of Dutch hotel lobby group Koninklijke Horeca Nederland (KHN), reckons this year might be different.
“You can already see that conferences are starting to be held in other cities. This affects not only hotels but also taxis and public transport, culture and retail,” he told the Financieele Dagblad newspaper.
He accuses Amsterdam’s municipal authorities of using the hotel tax not to curb tourism, but as a cash cow. Almost a quarter of the city’s tax revenue now comes from the tourist tax, up from 15pc in 2017.
“The tax is increasingly being used to plug holes in the municipal budget or to finance other policy objectives,” KHN said.
The industry has called for a legally enshrined cap on the tourist tax rate to prevent municipalities such as Amsterdam from tightening the ratchet further.
The Dutch experience offers a salutary warning to Andy Burnham as he contemplates allowing English municipalities to charge their own tourist tax.
If the rate is uncapped, then in the Netherlands and elsewhere in Europe it seems that the sky is the limit.
Some English councils have promised to charge no more than 5pc. But a stealthily levied tax, paid almost entirely by people who do not vote locally, is a temptation that almost no politician has proven able to resist.
Paris tripled its hotel tax in 2024, ostensibly to pay for upgrades to the city’s public transport. Other French cities are also pushing up their rates.
Across France, revenue from tourist taxes more than tripled in the decade to 2022, reaching €845m.
During last year’s fraught negotiations over France’s budget, one thing almost all the deadlocked parties could agree on was that they were happy to charge tourists more. They couldn’t agree on how, and how much.
This prompted a vexed Jean-Virgile Crance, the president of the French Confederation of Tourism Stakeholders, to warn politicians: “Let’s not kill the goose that lays the golden eggs.”
Tax-heavy Barcelona
In similarly tourist-heavy Barcelona, regional and city authorities have raised the tourist tax repeatedly in the past five years. By 2029, the tax for a night in a four-star hotel room will be more than 10 times what it was in 2020.
The rates aren’t as punitive as Amsterdam’s. Since April, a guest at a five-star hotel pays €12 a night, while a four-star guest pays €8.40.
The nightly tax at Airbnbs or holiday lets, most of which will be banned in Barcelona from 2028, is €9.50.
But these rates are per person and don’t include VAT. The cost can therefore add up quickly. And the rates are poised to increase again in coming years.
Spanish industry groups have criticised the tourist taxes as “a financial band-aid”, aimed at raising revenue while penalising one of the main engines of income and employment.
The taxes have not made much of a dent in Barcelona’s tourism. The city received a record 8.1 million guests from January to July. Visitors generated 22 million overnight stays, up 2.2pc from the same period last year.
Hoteliers worry, though, that the bulky end of the business could start to look elsewhere. Barcelona is one of the world’s four biggest cities for conventions and conferences, but customers may be footloose.
In the Balearics, the other region of Spain that levies significant tourist taxes, visitor numbers plateaued this summer.
The challenge is a shortage of accommodation, which has driven up room rates. The gripe hoteliers have about the region’s “sustainable tourism tax” is not that it exists, but how it is being spent.
María José Aguiló, the executive vice-president of the Majorca Hotel Business Federation, wrote in the Spanish trade magazine Hosteltur that only a fraction of the tax collected had been spent as intended on projects to boost tourism, infrastructure or housing.
“The political class … gets entangled in struggles to distract public attention from what a recent audit office report revealed: the inability to effectively manage the funds collected,” she said.
The industry’s hostility has not deterred politicians. Vigo, a port city in north-west Spain popular with passing cruise ships, has announced it will become the latest Spanish municipality to introduce a tourist tax.
English cities rolling out this tax will be in good company across Europe. The question is whether they will follow the Continent’s tempting lead and push the rates ever higher.