HOTREC has published a major economic study by Syntesia Policy & Economics on the impact of taxation on the hospitality sector in Europe. The research comes at a crucial time, as several governments consider increasing VAT and expanding local tourism taxes.<\/p>\n
Covering the EU-27, Iceland, Norway and the UK, the study combines macroeconomic modelling with case studies from Ireland, Amsterdam and Denmark. Its conclusion is clear: sudden or poorly coordinated tax increases could destabilise hospitality markets, particularly for SMEs and rural regions.<\/p>\n
In extremis, aligning hospitality with standard VAT rates would threaten, according to one of the scenarios analyzed, almost 1 million jobs. This would be equivalent to a 0.5% drop in EU GDP, largely due to business closures linked to low margins and supply-side shocks. Even a small 1 percentage point increase in VAT could reduce sales by \u20ac8 billion and eliminate over 100,000 jobs, many in vulnerable local economies.<\/strong><\/p>\n Importantly, the study also addresses the positive effects of the VAT decrease. A reduction of just 1 percentage point could generate additional revenues of 2.5-4 billion euros for the sector<\/strong> and could create between 30,000 and 50,000 jobs, a strong argument for VAT as a stabilization and competitiveness tool.<\/p>\n The report also highlights the rapid growth of tourism taxes in urban destinations \u2013 already approaching 40% of VAT revenues in some cities. Combined with labor costs and parafiscal taxes, these taxes form a cumulative burden that policymakers should assess holistically.<\/p>\n