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5th European Tourism Forum, Cyprus, 16-17 November 2007 Is the EU an expensive destination?

5th European Tourism Forum, Cyprus, 16-17 November 2007 Is the EU an expensive destination? A journey through taxes and charges affecting travel to and within Europe By Jan Van Steen, President of ECTAA European Tourism Forum, 16-17 November 2006 Is Europe an expensive destination?

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5th European Tourism Forum, Cyprus, 16-17 November 2007 Is the EU an expensive destination?

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  1. 5th European Tourism Forum, Cyprus, 16-17 November 2007 Is the EU an expensive destination? A journey through taxes and charges affecting travel to and within Europe By Jan Van Steen, President of ECTAA European Tourism Forum, 16-17 November 2006

  2. Is Europe an expensive destination? • Air transport becoming cheaper • New routes opening up • Travel becoming increasingly: global competitive • Europe competing with other destinations • Europe loosing market share European Tourism Forum, 16-17 November 2006

  3. Price essential factor for customer • Tourism very demand elastic • Need to carefully price products • Problem: Myriad of taxes, fees and charges added onto tourism services • Price inflated European Tourism Forum, 16-17 November 2006

  4. Price Supply 1 Supply Demand Quantity Effect of price increase on demand in case of price elastic demand European Tourism Forum, 16-17 November 2006

  5. Ranking of cities with highest taxes Source: World Travel & Tourism Tax Policy Center, June 2002 European Tourism Forum, 16-17 November 2006

  6. Ranking of cities with highest taxes as a % of price Source: World Travel & Tourism Tax Policy Center, June 2002 European Tourism Forum, 16-17 November 2006

  7. Example of taxes, fees and charges for trip to Europe Chinese tourist travels to Europe + coach tour • Schengen visa fee 60€ • Int. airport fees / charges 131€ • Fuel surcharges 60€ • VAT on coach travel 25% in DK, 16% in DE, 10% in AU/IT • Motorway user charges • Entry fees and high parking for coaches in historic sites in IT • VAT on hotel & restaurant 25% in DK, 16% in DE, 10% in AU/IT • Bed taxes per person / per night European Tourism Forum, 16-17 November 2006

  8. Example of taxes, fees and charges for trip to Europe – cont’d Chinese tourist travels to Europe + coach tour  On average package tour of 10 days sold for approximately 1000€ in China, 30% of the total price constitute taxes, fees and charges European Tourism Forum, 16-17 November 2006

  9. Example of taxes, fees and charges for trip within Europe Maltese tourist travels to London and Paris • Airport taxes 247€ • French solidarity tax air tickets 1-10€ • Fuel surcharges 78€ • VAT on hotel & restaurant 5,5% / 19,6% in FR, 17,5% in UK • VAT/charges for car rental 30,08% in London, 28,52% in Paris • Bed taxes per person / per night European Tourism Forum, 16-17 November 2006

  10. Conclusions - Recommendations • Enhance sustainable development of tourism rather than crippling it with unjustified taxes • Intelligent taxation: Reinvest tax receipt into tourism Abandon taxes, fees and charges that bear no link to tourism • Level-playing field - equal VAT treatment across Europe • Active involvement of tourism sector in formulation of tax policy European Tourism Forum, 16-17 November 2006

  11. Thank you for your attention! ECTAA bi-annual meeting, Athens, 1-2 December 2005

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