Tourism regions hit hard by VAT increase on accommodation

KHN: “This measure costs more than it delivers and comes at the expense of employment and liveability.”

The increase in VAT on lodging from 9 to 21 per cent as of 1 January affects not only hotels and holiday parks, but also the many businesses and facilities that depend on tourism - from pubs and restaurants to museums, shops and public transport. New calculations based on CBS figures show that provinces are losing billions in tourism spending, especially in regions like Zeeland, Limburg and Friesland.

30 per cent fewer overnight stays

The report by Significant APE (commissioned by the Ministry of Finance) shows that the number of overnight stays could fall by as much as 30 per cent due to the VAT increase. When answering parliamentary questions earlier, the finance minister said he did not take into account the loss of turnover in related sectors - the so-called second-order effects - because there would be insufficient visibility on this.

Based on CBS figures, it is possible to calculate that damage and to indicate how much the loss of turnover will be per province. There is also a good picture of what the impact will be on related sectors such as hospitality, recreation, transport within the Netherlands and shops.

In 2024, Dutch and foreign holidaymakers together spent 19 billion euros on stays in the Netherlands. A 30 per cent drop in overnight stays means a drop of as much as 5.7 billion euros in tourist spending.

On average, every euro a hotel guest spends on a room generates another two euros of additional turnover in other sectors. For foreign guests, this is as much as 3.50 euros. These so-called multiplier effects show how intertwined the tourism chain is economically.

Regions at risk

The economic damage is concentrated in tourist regions. The losses in Zeeland are €820 million, in Limburg €500 million and in Friesland €239 million. Gelderland, Drenthe and Overijssel are also seeing a sharp decline in tourism revenues. The impact is also visible at cultural institutions. For instance, according to the Museum Association, 27 per cent of museum audiences consist of foreign overnight visitors: visitors who help keep admission prices affordable and cultural institutions vital.

“If tourists stay away, the bakery, bike rental and restaurant will also disappear,” says Marijke Vuik, president of Koninklijke Horeca Nederland (KHN). “That affects not only entrepreneurs, but also residents and the liveability of entire regions. Tourism keeps the Netherlands moving, both economically and socially.”

Measure costs more than it delivers

The government expects €666 million of additional VAT revenue through hotels and holiday parks, but due to declining sales at both accommodation providers and related sectors, the treasury is actually losing €719 million. The measure appears to bring in extra revenue, but ends up being detrimental to the economy, treasury and society.

Marijke Vuik, president of Koninklijke Horeca Nederland (KHN): “Hospitality and tourism keep villages and cities lively. Therefore, it is of great importance that the VAT increase on lodging is reversed.”