Tourist taxes became more common in 2024. Do they solve over-tourism?

In Barcelona, they were attacked with water pistols.

In Seoul, they were forced off the streets at night time.

In Maui, fishing lines were cast where they swim.

And in Fujikawaguchiko, their photos were ruined by a 20-metre blockade.

Sufficed to say, tourists were not-so-welcome at some destinations in 2024.

Angry locals often blame visitors for pushing up prices, exacerbating housing shortages and crowding public amenities.

And as their anger reached fever pitch, governments across the world clambered for the same solution — the tourism tax.

This year, tourism taxes have been introduced or announced in places like Bali, Venice, Iceland, Aruba, Thailand and Wales.

And many jurisdictions are jacking up existing taxes, including New Zealand, which tripled its entry fee from $NZ35 to $NZ100 ($31 to $90) in September.

But while these taxes are popular among policymakers, they may do little to stop the flood of tourists.

How tourism went from hero to zero

Tourism taxes have existed in various forms for many years, from flat fees included in visas and airfares, to small nightly charges added to your hotel bill.

But the renewed enthusiasm for these taxes can be traced to the sudden shutdown of the tourism industry during COVID-19, according to tourism expert at the Auckland University of Technology, Tracey Harkison.

“It gave a lot of countries a lot of breathing space and a minute to stop and think what they wanted,” she said.

Some communities now want a permanent reduction in visitor numbers and have been taking matters into their own hands where authorities haven’t acted.

On the Canary Islands, anti-tourism vigilantes slashed hundreds of sun beds at beachside resorts and graffitied nearby shopping centres with slogans like “the Canary Islands will defend itself”.

Does easy fix actually reduce tourists?

Some policymakers see tourism taxes as an easy fix to an emotive issue, even if they are unpopular with industry.

In Wales, businesses were so concerned about a proposed tax of 1 pound and 60 pence a night that they shut their doors in protest, while New Zealand’s tourism lobby warned higher taxes would lead to 48,000 fewer visitors.

But after Venice introduced a 5 euros entry fee to reduce crowds during peak season, 7,000 more visitors actually arrived a day on average, according to The Art Newspaper.

Australian Travel Industry Association CEO Dean Long said there was “no evidence” tourism taxes did anything to reduce crowds.

“It just means people will spend less in that destination,” he said.

Mr Long said the real reason tourism taxes have become popular was that governments needed to raise revenue after spending “a lot of money they didn’t have” during the pandemic.

“The tourism industry has been on the frontline of increased taxes because it is seen by governments to be a tax that doesn’t carry a vote,” he said.

“And that’s really disappointing.”

Does the tax bill cover the damage?

Governments often argue that tourism taxes help fund infrastructure and conservation, but sustainable tourism expert James Higham said even New Zealand’s $NZ100 tax was “totally inadequate”.

“The IVL (International Visitor Conservation and Tourism Levy) may help to fund some local toilets and camping areas, but what about wastewater, sewerage treatment, electricity supply?” he said in his travel podcast, Checking In.

“While $100 may seem pretty steep it takes little of the burden off taxpayers and ratepayers.”

While New Zealand’s tax is “ring-fenced” to ensure it is spent on relevant projects, some taxes fall straight into consolidated revenue to be spent as a government sees fit.

And the amount raised can be undermined by poor design, like Bali’s new $15 tax which was paid by just 40 per cent of visitors in its first month.

Closing the ‘Pandora’s box of mass tourism’

Some countries are experimenting with non-monetary policy, such as visitor caps, to try and mitigate the negative impacts of mass tourism.

South Korea introduced a tourist curfew in the historic Bukchon Hanok Village while Italy banned key lock boxes used by short stay accommodation providers like Airbnb in certain city districts.

But Lonely Planet Central Asia travel writer Bradley Mayhew said it wasn’t easy to minimise the cultural and environmental cost “once you already have a million tourists”.

Some countries try to spread the burden and benefits of tourism by encouraging visitors to explore alternative attractions during non-peak periods.

But Mr Mayhew said social media often had the opposite effect, concentrating large numbers of visitors into “very Instagramable areas”.

“And that just accentuates the problem of overcrowding,” he said.

“A country like Italy has unlimited beautiful villages and places to see it. The problem is, everybody wants to see the same three places.”

Taking taxation to the extreme

For the mountain kingdom of Bhutan, protecting local culture and communities is so important that tourists are charged $US200 for every day they visit.

While the fee was temporarily halved to assist the post-pandemic recovery, Mr Mayhew said most locals supported the high tax as a way to limit visitor numbers.

“Bhutan is a very small country, sandwiched between the giants of China to the north, India to the south,” he said.

Department of Tourism chief marketing officer Carissa Nimah said the revenue from the tourism tax funded public services, such as free health care, to ensure “the benefits from tourism actually go to the entire community, not just the stakeholders in tourism”.

“It’s something that’s really good for Bhutan and for the future generations, but there is pushback from the industry who want the volume now,” she said.

“But for a small country with 750,000 … imagine if we had a million or 2 million tourists a year.

“It has the possibility or the potential to erode the very thing that makes Bhutan unique.”

Ms Nimah said Bhutan’s strategy of prioritising “high-value” tourism over scale had attracted the attention of other countries and organisations who “talk to us regularly about this topic”.

“More and more destinations are going to look at this because over-tourism is such a difficult thing to manage,” she said.

But even a notoriously high tax won’t stop tourists from coming, with visitation to Bhutan expected to exceed pre-pandemic levels of 350,000 in 2025.

Will tourists ever stop coming?

In the 15 years before the pandemic, international tourism doubled to 1.5 billion arrivals, a figure which was exceeded this year and is expected to keep growing.

And for many communities, tourism is a vital industry providing economic opportunities, cultural exchange and global recognition.

Ms Harkison, from Auckland University of Technology, said for New Zealand, the very idea of limiting people doesn’t sit well with manaakitanga — the belief that people arrive as strangers but leave as whānau, family.

Instead, the government was trying to find a more sustainable future for the industry, through taxation, better management and more diverse experiences.

“You’re never going to be perfect because you’re never always going to make everybody happy,” she said.

“We just have to ensure that we’re moving towards a more regenerative and sustainable industry.

“Or we’re actually going to have nothing to look at or offer our tourists.”