Greece Implements New Climate Resilience Levy for Tourists

In an effort to support the reconstruction initiatives following severe forest fires and floods, the Greek government has implemented a fresh accommodation tax, which has recently gone into effect this January.

The “Climate Resilience Levy”

Titled the “climate resilience levy,” this tax is a step up from the previous bed tax and is designed for tourists to pay at their lodging upon arrival. The government has structured it as a tiered payment system, with varying tax rates depending on the official rating of the accommodation. This tax is applicable only during the peak tourist season, spanning from March to October.

The tax rates range from one euro to four euros per night, with the charge determined by the accommodation’s rating. For instance, guests staying in one or two-star hotels or apartments will now be responsible for a fee of 1.50 euros, while those in three-star hotels will pay three euros. Those seeking the comforts of four-star hotels will incur a charge of seven euros, and those indulging in the luxury of five-star establishments will be subject to a fee of 10 euros.

It is essential to note that these taxes are not included in the holiday prices presented by travel operators and agents. Travelers are required to pay them in the local currency at the accommodation itself.

Greek Hoteliers Challenge Climate Resilience Tax Amidst Concerns of Market Distortion

Hotel proprietors in Greece have voiced their objections to the introduction of a climate resilience tax, pointing out that it introduces unfair advantages and complications within the marketplace. This tax, set to take the place of the stayover tax established in 2016, has been criticized for overlooking the considerable price fluctuations that can occur across different hotel categories and throughout the seasons. The Hellenic Hoteliers Federation (POX) has pointed out that this could lead to disproportionately high charges for economically priced hotels, particularly during the off-season, potentially diminishing the competitive edge of Greece’s hotel sector and hindering attempts to promote tourism throughout the year. The federation estimates that over a quarter of the hotels, particularly those offering the most affordable rates, will be adversely affected. POX suggests capping the climate resilience tax to the roughly 136 million euros currently collected from the stayover tax annually and recommends extending similar levies to short-term vacation rentals due to their significant environmental impact.

The climate resilience tax, aimed at funding reconstruction efforts following natural disasters such as floods and fires, is structured to vary with both the season and the accommodation type. From March to October, the tax will range from 1.5 to 10 euros per night for hotels, with a lower rate from November to February. The tax also applies to short-term rentals on digital platforms, with charges set at 1.50 euros for apartments and 10 euros for detached homes and premium lodgings.

Hotel operators have also expressed concern that the levy is exclusively targeting the hotel industry, which they argue places an undue strain on a single sector of the Greek economy. They are calling for a more nuanced approach that considers the levy’s profitability by destination and accounts for the diverse needs of different regions, taking into account the geographic and temporal spread of tourism.

Amidst broader regulatory discussions impacting the hospitality and tourism sector, efforts are being made to level the playing field between hotels and short-term rental accommodations. Greek Tourism Minister Olga Kefalogianni is moving forward with plans to introduce additional regulations focusing on the technical and operational standards for short-term rentals, aiming to prevent unfair competition with traditional hotels.