Europe’s tourism resilience will be decided in the back office

Harvey Dhillon, the Founder and CEO of Zmartly, states that the resilience of Europe’s tourism will be determined by the back office

Ask what makes tourism resilient, and most answers involve visible things: rail links, airports, promotion. The European Commission’s own list is wider. Its page on the resilience of European Union (EU) tourism names business demography, seasonality, public funding and the regulatory environment among the factors that decide how well the sector absorbs a shock. The regulatory environment gets the least attention, and for most businesses in the sector, it may matter most.

I advise small businesses in the UK, many of which trade through online platforms. From that seat, the question I would put to Commissioner Tzitzikostas, as he sets priorities under the European Agenda for Tourism 2030, is simple. Will a family letting four rooms, or a driver with one minibus, understand the rules well enough to keep trading through the next crisis?

A sector of small operators

The Commission puts tourism at nearly 10% of EU GDP in 2019, with around 23 million jobs. Article 195 of the Treaty on the Functioning of the European Union says the Union “shall complement the action of the Member States in the tourism sector, in particular by promoting the competitiveness of Union undertakings in that sector”. Many of those undertakings are guesthouses, guides, small coach firms and family restaurants. When a shock arrives, they have no tax department and little cash in reserve. Their resilience is the owner’s time.

The tax collector is moving to the platform

The most consequential change for those owners is not in a tourism document. It is in VAT. Under the VAT in the Digital Age package, adopted on 11th March 2025, platforms facilitating short-term accommodation rental and passenger transport by road become responsible for collecting and remitting VAT when the suppliers using them do not. The rule applies from 1st July 2028, and Member States can delay it until 1st January 2030.

The Commission’s aim, a level playing field between online and traditional providers, is fair. A hotel charging VAT should not compete against a similar listing that escapes it. The UK offers a preview of the mechanics. Since 1st January 2021, online marketplaces there have been liable for VAT on goods sold through them by overseas businesses from stock held in the UK. Making the platform collect works, because it holds the data. In my experience, though, the small seller is often the last to understand what the platform did on their behalf, and why their own figures no longer match.

The new rule also lands beside the reformed small and medium-sized enterprise (SME) scheme, in force since 1st January 2025. Small enterprises with total EU turnover of up to €100,000 can now use VAT exemption across borders, and national thresholds can be set at up to €85,000. Depending on how their Member State applies the rule, a host exempt when a guest books directly may find VAT collected on the same room when it is booked through a platform. That can be the right policy and still baffle the person it applies to.

Three things that would help

First, one plain explanation, published by the Commission in every official language well before July 2028, of how the deemed supplier rule and the SME scheme interact for a small host, with worked examples. An owner should not need an adviser in each country to learn whether a room price includes VAT.

Second, finish the work on travel agents. The Commission says it is evaluating the VAT scheme for travel agents and options for possible simplification. Small operators who package local experiences carry some of the sector’s most complex compliance on some of its thinnest margins. A simpler scheme would do more for them than most grants.

Third, measure the burden. Resilience is usually tracked through arrivals and jobs. Add the hours a micro-business spends each year on tax and reporting. What gets measured in Brussels tends to get simplified.

Rail helps only if small firms can follow

The Commission’s high-speed rail plan, unveiled in November 2025, and its May 2026 proposal for single ticket booking across rail operators, still only a proposal, could carry visitors to regions that see few today. That is good news for the small businesses near new routes, but only if they can register, invoice and file without friction. Seamless travel for the passenger needs seamless compliance for the business waiting at the other end.

Europe’s tourism policy speaks often of resilience. For most of the sector, resilience is not a terminal or a timetable. It is an owner who understands their obligations and still has the time to run the business.