Monday, September 9, 2024 In 2023, tourists in the Netherlands reached a record-breaking level of spending, surpassing 100 billion euros, according to a report by Statistics Netherlands (CBS). This milestone reflects a robust tourism sector, with both international and domestic visitors contributing to the nation’s economy through various recreational activities, hospitality, and services. The surge in tourism spending highlights the growing appeal of the Netherlands as a top destination for travelers seeking diverse experiences, from cultural landmarks to scenic landscapes.
The high demand for accommodations, dining, and leisure activities has been pivotal in reaching this all-time high in tourist expenditure. However, this trend might face a setback in the near future due to the Dutch government’s plan to increase VAT on several recreational activities. These tax hikes are expected to impact the overall cost of tourism-related services, potentially leading to a decline in visitor spending.
As tourists reassess their travel budgets in light of the anticipated price increases, there could be a shift in demand for certain leisure options, affecting the country’s thriving tourism industry. The upcoming VAT changes have sparked concern about maintaining the momentum of the record-breaking year, as businesses and visitors alike brace for a potential reduction in tourism-related expenditure. Dutch tourists reached record-high spending levels in the Netherlands In 2023, tourists in the Netherlands spent nearly 13 billion euros more than the previous year, with total tourism spending reaching an unprecedented 105 billion euros.
This marked the highest tourism expenditure ever recorded in the country. Residents of the Netherlands were the biggest contributors, spending 65.17 billion euros domestically, while international tourists accounted for around a third of the total, spending 34.
48 billion euros. An additional 5.28 billion euros was allocated to “durable goods and expenditure,” which includes reusable items like camper vans, whose popularity continues to grow.
Dutch hotels are set to face a VAT hike, rising to 21 percent Earlier this year, the Dutch government revealed its intention to raise the VAT on several goods and services, including books, concerts, museums, and various attractions. Hotel accommodations are also set to be impacted by the VAT increase, which would jump from 9 percent to 21 percent. ABN Amro reported that the government anticipates the VAT hike to generate 910 million euros in tax revenue, based on the 6.
8 billion euro turnover of hotels in 2022. However, experts at the bank suggest that the actual figure will likely be closer to 285 million euros, falling nearly two-thirds short of the government’s projections. Hotel tax revenue falls short of expectations Despite the cabinet’s projection of a minor decline in hotel revenue due to the tax increase, ABN Amro notes several factors that may have been overlooked in their estimates.
The rise in tax is likely to lead to fewer overnight stays as prices climb, reducing hotel profits and subsequently, profit tax. Additionally, a significant portion of hotel guests (40 percent) travel for business purposes, allowing companies to reclaim VAT. Stef Driessen, a researcher at ABN Amro, pointed out that hotels also earn revenue from room rentals, parking, and dining, which are not impacted by the VAT hike.
Considering these factors, the VAT increase will actually influence only 34.8 percent of total hotel revenue, resulting in much lower tax revenue than the government’s projected 910 million euros..
