BU researcher questions Venice tourist tax

2 September 2011

Tourism economics expert, Dr Neelu Seetaram, questions economic viability & consumer reaction.

Bournemouth University academic Dr Neelu Seetaram has questioned the introduction of a tourist tax in Venice, which will see visitors to the city paying an additional nightly charge on hotel rooms and even campsites.

The tax was put in place by the Council for Tourism in Venice to contribute to cleaning, transport, policing and other maintenance in lieu of recent government cuts in Italy.

Speaking to Peter White on Radio 4’s ‘You and Yours’, Dr Seetaram cited her research into tourism taxation in New York as evidence.

“A five percent tax was imposed on rooms costing £100 per night or more,” she explained. “Numbers went down so badly that New York State lost £962 million in terms of other tax foregone in order to collect £463 million from this new tax that was imposed.”

Similarly a bed tax, introduced in 1990 in Sydney’s Central Business District, had disastrous consequences. The government-imposed five percent bed tax was intended to contribute to the cost of the Olympics, but hotels saw a 8.5% fall in revenue, 243 full time job losses and a dip in the economy.

Dr Seetaram said: “The visitors tend to stay for fewer days and reduce expenditure on other items. They also chose to travel to other areas of Australia rather than Sydney.”

“When cost goes up visitors will tend to do something about it,” she continued. “Research shows they react very strongly to changes in the price they pay for their holidays. Eventually you would start seeing either a drop in numbers of people coming, or those that do turn up would spend less money.”

Listen to Dr Seetaram on You and Yours here.