Overview

According to the EEA (2021), tourism contributes about 5% of the European Union' total GHG emissions. The tourist tax is a fee charged by some municipalities per night of accommodation. It is levied on visitors staying in hotels, vacation rentals, or other lodgings. The revenue from this tax is often used to support local services as well as tourism management, but environmental efforts could also be funded through tourist tax. An innovative tourist local taxation policy was implemented in Nicosia (CY) and inspired Slovenian municipalities too. Nicosia’s Municipality approved the increase of 5% in the hotel accommodation tax per room per night. According to the design of this fiscal policy, the money for the first 3 years that will be raised through the increased taxation, will be ringfence in a green mechanism-fund and used to provide free energy audits to hotels in Nicosia region, as well as the funding of awareness events to promote energy efficiency and RES in the hotel sector.

Evidence of success

If all hotels received free energy audits funded by a tourist tax increase over 6 years:
• 15% energy savings from hotels implementing low-cost measures, saving 978 MWh.
• 30% energy savings from hotels implementing high-cost investments, saving 1,955 MWh.

LOCATION

Nicosia (CY); Križevci (SL)

TIMESCALE

2019-ongoing

Potential of learning or transfer

The main innovative element of Nicosia’s tourist tax policy is that the tax increase is accompanied by allocating the additional revenue to environmental actions with a direct impact on promoting renewable energy. The tourist tax is widely levied by municipalities in several countries and regions within the European Union, and the replicability potential of this fiscal model is highly relevant for EU local authorities.

Contacts

For the Cypriot municipalities:
Cyprus Energy Agency: info@cea.org.cy

For the Slovenian municipalities:
ZRMK: info@gi-zrmk.si