‘The Netherlands is pricing itself out of the market by raising VAT on accommodation’

The increase in VAT on accommodation from 9 to 21 per cent is having a direct impact on hotels and holiday parks. Business owners can only pass on the higher costs to a limited extent without losing guests. As a result, profit margins are shrinking, whilst wages and local taxes continue to rise. The pressure is mounting particularly in coastal and border regions: the Netherlands is becoming more expensive than neighbouring countries with lower rates. Coastal municipalities are warning of the consequences for the economy, employment and quality of life. Without adjustments, investment in quality, sustainability and innovation risks coming under further pressure.

Raise the price or reduce the margin

Since 1 January, the standard VAT rate of 21 per cent has applied to short-term stays in hotels, holiday parks, guesthouses and B&Bs, amongst others. Previously, the rate was 9 per cent. In practice, this means that business owners must choose between raising prices – at the risk of losing bookings – or absorbing part of the tax themselves.

This decision comes at a difficult time. The sector is already grappling with higher labour costs (up 25 per cent since 2020) and rising tourist tax (the average tourist tax has risen by 31.4 per cent over the period 2021–2025). Added to this is the need to invest in quality, sustainability and innovation. At the same time, the sector’s international competitive position is deteriorating. In Germany and Belgium, VAT rates for accommodation are lower, making the Netherlands relatively expensive for both domestic and international guests.

Coastal towns sound the alarm

KIMO/VNKG, the Association of Dutch Coastal Municipalities, recently raised the alarm with the minister about this issue. The coastal municipalities fear that the decline in overnight stays will affect not only accommodation providers, but also the regional economy, employment and the quality of life in coastal towns.

Revising the VAT rate could help in this regard, but local authorities also have a say through tourist and parking charges. In addition, businesses can focus on more competitive packages, greater added value and regional cooperation.

Quality of supply under pressure

If no action is taken, investment capacity in particular will come under pressure. This will affect the quality of the offering at a time when guests are actually expecting more. The VAT increase is therefore not only a fiscal measure, but also a risk to the appeal of Dutch tourist regions.