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5th European Tourism Forum, Cyprus, 16-17 November 2007 Is the EU an expensive destination? A journey through taxes and charges affecting travel to and within Europe By Jan Van Steen, President of ECTAA European Tourism Forum, 16-17 November 2006 Is Europe an expensive destination?

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5th European Tourism Forum,

Cyprus, 16-17 November 2007

Is the EU an expensive destination?

A journey through taxes and charges affecting travel to and within Europe

By Jan Van Steen,

President of ECTAA

European Tourism Forum, 16-17 November 2006


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Is Europe an expensive destination?

  • Air transport becoming cheaper

  • New routes opening up

  • Travel becoming increasingly:

    global

    competitive

  • Europe competing with other destinations

  • Europe loosing market share

European Tourism Forum, 16-17 November 2006


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  • Price essential factor for customer

  • Tourism very demand elastic

  • Need to carefully price products

  • Problem: Myriad of taxes, fees and charges added onto tourism services

  • Price inflated

European Tourism Forum, 16-17 November 2006


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Price

Supply 1

Supply

Demand

Quantity

Effect of price increase on demand in case of price elastic demand

European Tourism Forum, 16-17 November 2006


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Ranking of cities with highest taxes

Source: World Travel & Tourism Tax Policy Center, June 2002

European Tourism Forum, 16-17 November 2006


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Ranking of cities with highest taxes as a % of price

Source: World Travel & Tourism Tax Policy Center, June 2002

European Tourism Forum, 16-17 November 2006


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Example of taxes, fees and charges for trip to Europe

Chinese tourist travels to Europe + coach tour

  • Schengen visa fee 60€

  • Int. airport fees / charges 131€

  • Fuel surcharges 60€

  • VAT on coach travel 25% in DK, 16% in DE, 10% in AU/IT

  • Motorway user charges

  • Entry fees and high parking for coaches in historic sites in IT

  • VAT on hotel & restaurant 25% in DK, 16% in DE, 10% in AU/IT

  • Bed taxes per person / per night

European Tourism Forum, 16-17 November 2006


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Example of taxes, fees and charges for trip to Europe – cont’d

Chinese tourist travels to Europe + coach tour

 On average package tour of 10 days sold for approximately 1000€ in China, 30% of the total price constitute taxes, fees and charges

European Tourism Forum, 16-17 November 2006


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Example of taxes, fees and charges for trip within Europe

Maltese tourist travels to London and Paris

  • Airport taxes 247€

  • French solidarity tax air tickets 1-10€

  • Fuel surcharges 78€

  • VAT on hotel & restaurant 5,5% / 19,6% in FR, 17,5% in UK

  • VAT/charges for car rental 30,08% in London, 28,52% in Paris

  • Bed taxes per person / per night

European Tourism Forum, 16-17 November 2006


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Conclusions - Recommendations

  • Enhance sustainable development of tourism rather than crippling it with unjustified taxes

  • Intelligent taxation:

    Reinvest tax receipt into tourism

    Abandon taxes, fees and charges that bear no link to tourism

  • Level-playing field - equal VAT treatment across Europe

  • Active involvement of tourism sector in formulation of tax policy

European Tourism Forum, 16-17 November 2006


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Thank you for your attention!

ECTAA bi-annual meeting, Athens, 1-2 December 2005


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