Kon'nichiwa or Hallo? First, pay a tourist tax

From Bhutan revisiting its tourist tax policy to Iceland expanding taxation, here’s a guide to navigating the new era of taxed travel.

Interchangeably used with visitor levy or accommodation tax, tourist tax is a fee imposed on travellers by a country to help fund local infrastructure, services and tourism. Mostly, the collected fund is reinvested in the destination but in some cases, the fee can limit and regulate people from contributing to overtourism.

DOES THE TAX HELP?

Tourist Tax

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"It can be a potent tool in combating overtourism. Thailand's move to collect fees for environmental conservation sends a powerful message about the need for responsible tourism," explains a representative of Conservative Corridor, a specialist group in conservation management, adding, "Similarly, Venice's decision to charge day-trippers €5 per person (to be implemented from 2024) will help steer visitors towards less congested periods.”

THE FLIP SIDE

While Bhutan's Sustainable Development Fee (SDF) which levied a $200 charge per person, was hailed as a landmark decision, the policy drastically impacted the footfall of travellers. "Despite lowering the SDF to $100 per person per night, Bhutan still grapples to meet its tourism targets. They are making efforts to counter this and have introduced a significant reduction in airfares as part of its recent initiatives, to drive an increase in flight bookings to and from the Himalayan kingdom," Phuntsho Gayleg, a Thimpu-based guide and local expert.

HOW TO NAVIGATE AROUND THE TAX?

1. Before finalising your travel plans, research your destination's tourism tax policies. Different places have varying tax rates and regulations. Most information is available on official tourism websites.

2. Factor in the tourism tax while creating your travel budget. In some cases, the tourist tax can be both a part of the visa fee as well as accommodation.

3. Look for exemptions. For instance, Indian visitors, constituting about 73% of Bhutan's total arrivals, can obtain a special permit via the Bhutanese government's visa portal. They are required to pay a daily fee of ₹1,200 Rs. or $15) for their visit. Accommodations often play a significant role in tourism taxes.

4. Establishments can charge higher taxes for luxury or high-end accommodations and in countries like the Netherlands and Austria, they can sneak into your nightly hostel budget, too. Tourist taxes for Airbnb, homestays and private accommodations are still undefined.