Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Italy is proposing a sharp increase in tourist taxes to help cash-strapped cities raise revenues and make visitors “more responsible” amid a growing public backlash against over-tourism.
Hotel and travel industry associations are up in arms over the plan, which envisions a levy of up to €25 a night for the most expensive hotel rooms.
“The common objective must be to support growth, not slow it down,” Federalberghi, an association representing small and medium-sized hotels, said in a statement.
Barbara Casillo, director of Confindustria Alberghi, which represents larger hotels and global chains, warned that Italy was already facing fierce competition from other European destinations and might lose out by increasing tourist taxes that she called “already very high”.
“If we scare travellers who come to us by giving the impression that we want to take what we can, we are not doing a good service to the country,” Casillo said in an interview. “We must be very careful.”
The tourism ministry — run by Daniela Santanchè of Prime Minister Giorgia Meloni’s Brothers of Italy party — said it was planning “a dialogue” with relevant industry bodies in September over the “possible proposal to modify the rules of the tourist tax”.
“Not all taxes are a tax,” Santanchè wrote in a recent social media post. “In times of over-tourism, we are debating this so that it really helps improve services and make tourists who pay it more responsible.”
Marina Lalli, president of Federturismo — which represents all types of tourism companies — complained that many cities already “illegally” use tourist tax revenues to plug budget holes. The current law requires cities to use such funds to pay for things directly relevant to out-of-town visitors — like multilingual signage and maintenance of tourist sites.
“When you go and fix your streets that are full of holes — and you pay with money you collect from tourist tax — is this really for tourists, or is this a normal, ordinary thing that you should do in your city?” she said.
The debate comes as Italy faces heavy pressure on its public finances, with its debt burden, according to IMF forecasts, set to reach nearly 140 per cent of GDP this year, and its annual debt servicing costs now almost equal to public education expenditure.
Italy’s travel industry has seen a strong rebound after the collapse triggered by Covid-19, with industry associations estimating 2023 foreign tourist arrivals at 65mn — on a par with pre-pandemic levels.
But many Italians are up in arms at the fallout from over-tourism, as historic city centres lose their traditional character and ever more urban apartments are converted into short-term holiday rentals.
Italian cities can impose taxes for overnight stays by both foreign and Italian visitors, and these now typically range from €1-€5 per person per night, depending on the number of stars held by the hotel or guest house that collects them.
In 2019, before the pandemic, nearly 1,200 municipalities collected a total of €470mn in tourist taxes, according to the Bank of Italy. But collections rose to an estimated €775mn in 2023 after Meloni’s government decided to let the most popular city destinations — with annual out-of-town visitor numbers 20 times higher than the local population — raise their tourist taxes to up to €10 person per night.
This year, Venice has experimented with an entry fee for day trippers visiting its historic centre.
The government’s latest proposal, seen by the Financial Times, suggests increasing the tourist tax ceiling to €5 per room per night for a room under €100; €10 per night for rooms costing €100-€400; €15 for rooms priced at €400-€750; and €25 for rooms that are more than €750.
The rules also specify that the funds could support trash collection, drawing the travel industry’s ire.
“It’s very important to have a decent looking city — at least in the tourist areas — but it’s not just that we should use money from the tourists to fix things that happen in areas that tourists do not even go,” Federturismo’s Lalli said.
But the proposal could be cheered by residents of fragile urban centres, now struggling to cope with overwhelming visitor numbers.
“Tourism strains the nature and the entire infrastructure of the city,” said Eike Schmidt, former director of Florence’s Uffizi Gallery, and now a member of its city council. “Italy is far from Bhutan, but it is absolutely correct to have bigger contributions from tourists.”
