Amsterdam approves sharp tourist tax increase despite objections from businesses

The Amsterdam City Council passed the local coalition’s budget for 2027, including a measure that hikes the tourist tax from 12.5 percent to 16 percent in 2027. The coalition of aldermen from left-wing PRO and centrist D66, led by Mayor Femke Halsema, want the tourist tax to continue to increase by one percent annually until it reaches 20 percent.

The decision was made despite sharp criticism from the city’s cultural institutions and hospitality groups, both of which have been struggling since the coronavirus pandemic. Despite their fears, Halsema said the need to stall over-tourism was paramount. Even with Amsterdam’s current tax, the city hosted a record high of 21 million tourists last year, overwhelming many residents of the city’s most dense and popular neighborhoods.

Hospitality businesses fear the higher tax will drive visitors to stay outside Amsterdam rather than reduce the number of people visiting the city. In an open letter signed by 47 industry figures, including hospitality entrepreneur Won Yip and outgoing Corendon CEO Gunay Uslu, they warned: "If higher prices lead visitors to stay overnight outside Amsterdam instead, that does not mean those visitors stop coming to Amsterdam. They will still visit the city center during the day but would ultimately spend less money there." The signatories said this could have significant consequences for cultural venues, events and hospitality businesses

The cultural sector has warned that higher accommodation costs could make it more difficult to attract international artists and speakers. About 90 percent of the creators and artists invited to the annual Holland Festival come from abroad, making travel and accommodation a significant part of its budget. "The rise in VAT and tourist taxes directly impacts the festival's artistic budget, so the options are decreasing the program or increasing the prices," a spokesperson said.

Alderman Melanie van der Horst argued that the revenue from the tax is also needed to tackle issues, “for example, waste collection.” Research commissioned by the city government shows that the tax will bring down the number of tourists, without denting financial resources, she claimed.

However, the coalition has not actually analyzed the downside of such a tax hike, said the VVD. One council member from the right-wing opposition party, Myron van Gerhardt, said the tax hikes will end up as a barrier for the types of tourists the city actually wants, without impacting those tourists “who bother residents, and make a lot of noise.” The VVD questioned whether the coalition was truthful in its motivation for the tax hike. Van Gerhardt was quoted by AT5 as wondering if the tax hike was a tool leading to “fewer visitors, or a means to raise more money.”

In any case, the VVD, center-right CDA, and hard-right JA21 looked for ways to amend the tourist tax portion of the budget to address concerns of the hospitality and cultural sector, as well as their own political opposition to the tax hike. They proposed making the tax a fixed amount of 14.50 euros per person per overnight in the city, which would serve as a way to encourage tourists who are “the most financially capable” of paying the tax, and are also perhaps the “least disruptive” visitors.