With overnight stays jumping from 8.8 million in 2005 to 20.1 million in 2025 for a city of just 2 million people, Vienna plans to more than double its tourist tax by 2027 in order to fund high-end tourism and preserve the quality of service the city is known for. But hoteliers and travel agencies believe that it will hurt the industry that has fueled the city’s popularity.
Known for being clean, safe, and welcoming, for two decades the capital of Austria has been at the top of the list in terms of quality of life. Along with Copenhagen and Melbourne, it regularly finishes first or second in the world.
Sharp Tax Hike
However, starting from early July, the city will increase its tourist tax from 3.2 to 5 percent, and then to 8 percent. This places Vienna’s tourist tax second in Europe, right after Amsterdam’s 12.5 percent, according to Martin Stanits, spokesman for the Austrian Hotel Association (OeHV).
Hoteliers already feel the burden of tightening belts as they have to pay more for energy, staff, and food, on top of heavy taxation. Stanits criticizes the city’s decision, saying that it has been living beyond its means for too long and bleeding the tourism industry to fill the coffers. “Killing the cow you want to milk is really not a great idea,” he said, criticizing the government for using the tourism industry as a piggy bank. Travel agencies have similar concerns about the increase in taxes.
Industry Concerns Mount
According to Gregor Kadanka, president of the travel agencies association, the industry finds itself in a bad position as it has to deal with an onslaught of new taxes. For instance, an additional 12-euro tax on airline tickets was recently imposed. Kadanka believes this puts Austria at a disadvantage as budget airlines like Ryanair will take advantage of the weaker euro and offer cheaper flights to nearby Bratislava in Slovakia.
Vienna is also seeing an influx of visitors, but their numbers are growing at a slower rate than in neighboring Central European countries. Compared to Prague, which only charges its visitors 2 euros per night, and Budapest, which has a 4 percent hotel tax, Vienna’s 5 percent tourist tax seems expensive. It is even surpassing other European capitals in terms of costs and threatening to overtake them in popularity.
City Defends “Shared Responsibility”
Despite growing concerns in the industry, Vienna remains steadfast in its position. The city argues that it is only doing its part as “a popular destination offering first-class service and reliable, efficient public transport and good infrastructure.” The additional revenues from the tourist tax will help to ensure the level of service Viennese visitors are accustomed to and will allow the city to compete with the likes of Copenhagen and Zurich. It was this image of a high-end European destination that focused on classical music, museums, congresses, and politics that helped Vienna avoid the pitfalls of mass tourism.
