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Society

Greek Hoteliers Say New Tourist Tax Will Hurt Big

January 4, 2018

ATHENS – Whacking tourists with another tax, this one for staying in a room overnight, will put a big crimp in successive record-breaking seasons and jeopardize 2018’s summer, Greek hoteliers have warned.

After pressuring Prime Minister and Radical Left SYRIZA leader Alexis Tsipras to put taxes up to 45 percent on Airbnb and short-term rentals to prevent competition, the hotel owners said the so-called stayover levy that ranges from 54 cents to 4 euros ($4.82) per night, will drive people to rival countries that offer cheaper accommodations.

The Finance Ministry said the cost will be borne by tourists and not hotels and is part of an avalanche of new taxes and hikes imposed by Tsipras after he swore to cut taxes and reverse austerity before surrendering to demands from international creditors.

A year ago, when the tax was first proposed – it came into effect on Jan. 1 this year a study by Grant Thornton for the Hellenic Chamber of Hotels said the stayover levy would be a blow in pricing, quality and cost job losses.

Camping sites, youth hostels and traditional tourism accommodation businesses will be exempt, according to the law, which was voted on in 2016.

The imposition of the levy may harm the momentum of Greek tourism and the Greek economy, the Hellenic Federation of Hoteliers warned, the Chinese news agency Xinhua said in a report.

In the medium term, the loss from the levy – which will be calculated based on the number of overnight stays at an accommodation unit – is expected to come to 435 million euros per annum, which is more than five times the yearly benefit of 84 million euros that the state is projected to collect. It has also been estimated that the levy will cost the sector 6,174 jobs.

The tax creates pressure on final prices if passed on to customers or increase corporate costs if absorbed by the hotels. In a global market where the Internet allows for instant price comparisons, every euro makes a difference, according to sector officials.

The head of the chamber, Giorgos Tsakiris, last year called on the government to revise its decision for the levy, branding it “destructive,” while the President of the Greek Tourism Confederation (SETE), Yiannis Retsos, warned it may be “be too late” for changes after the tax effect hits.

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