Tourist taxes are becoming a major income generator for European cities, with Italy expecting to collect over $1.2 billion in 2025, up from $628 million in 2022. This trend is driven by an increasing number of municipalities adopting the tax and existing ones raising their rates. Rome alone is projected to bring in $288 million, while Milan's revenue is set to reach $113.5 million by 2026, partly due to the Olympics. In the first half of 2026, Italian local authorities collected over $438 million, a 13% increase from the previous year, with total revenue for 2026 estimated to hit $1.308 billion.
Amsterdam exemplifies the aggressive adoption of tourist taxes, with its hotel tax gradually rising from 5% to a planned 20% by 2031, in addition to a national VAT increase on hotel stays. This could mean a visitor paying $150 for a room will soon pay over $60 in taxes per night. While aimed at curbing overtourism, critics argue the tax has become a "cash cow," with almost a quarter of Amsterdam's tax revenue now coming from tourism, up from 15% in 2017. This has led to concerns from the hotel industry, which notes a shift of conferences to other cities.
Other European cities are following suit; Paris tripled its hotel tax in 2024 to fund public transport upgrades, and French cities collectively saw tourist tax revenues more than triple to $845 million in the decade to 2022. Barcelona has also repeatedly increased its tourist tax. This growing reliance on tourist taxes as a municipal funding source is seen as a warning for English municipalities, which are now being given the power to implement their own tourist taxes, estimated to be around 5%. A 5% tax across England could generate approximately $600 million annually, with British tourists contributing 63% of the receipts. However, such a tax could also lead to 5.8 million fewer nights in taxed accommodations and a loss of about $689 million in gross visitor spending.
