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15.11.2011 14:49Berlin Joins other German Cities in Imposing Hotel Tax
Hotel operators will take differing approaches, in the view of Thomas Lengfelder, head of the city’s hotel and restaurant association, with the bigger companies absorbing the costs, while the traditional family-run establishments are forced to pass it on
© pickselated/Jim@flickr.com
German cities are seeking to recover the funds they lost when the federal government more than halved the value-added tax the hotel sector is required to impose. They are now reaching for a local tax on overnight stays to make up for the lost income, DPA reported.
Berlin, the slightly grubby but terribly trendy capital, is now seeking to join other big cities like Hamburg and Cologne along with smaller destinations like Weimar and Aachen in introducing a City Tax aimed at tourists.
More than a dozen German cities have now introduced what is effectively a bed tax.
‘I believe it’s fair to require our visitors to contribute to the costs of the touristic and cultural events that Berlin has to offer,’ city Finance Senator Ulrich Nussbaum says. Just 18 months ago, his department turned down the idea of a bed tax, fearing it might scare off the tourists.
But now, under pressure to balance the books of a city deeply in the red, the senator is looking for additional sources of income after VAT was cut from 19 to 7 per cent in the hotel sector.
The German tourism association is dead against the idea as is the hotel and restaurant association, They use terms like ‘fiscal highwayman’ and ‘rip-off’ to describe the move.
The federal government’s commissioner for tourism, Ernst Burgbacher, has also raised a warning finger, even though the amounts involved are likely to be small.
No figure has yet been fixed, but speculation centres on 5 per cent of the cost of the room for the night, while Nussbaum has spoken about an amount equivalent to a ticket on the city’s public transport system – 2.30 euros (3.10 dollars) for the entire inner-city area.
Berlin would thus be cheaper than Cologne. The ancient city on the Rhine with its spectacular cathedral was the pioneer of the tourist tax idea and charges 5 per cent, taking in 7 million euros last year alone with predictions for this year for double that amount.
Weimar, the home of Goethe and a relatively small city that has had a thorough makeover and draws tourists in search of culture rather than nightlife, is close to bringing in a much-needed million euros.
Berlin, with 2 million overnight stays a year, is greedily eyeing as much as 50 million euros – not much compared to its debts of 64 billion, but twice as much as it has lost from its share of the VAT take. According to the senate, that came to 24 million euros in 2010.
But the union that represents fiscal workers has warned that the costs of administering the tax have to be set off against the additional income. Union boss Thomas Eigenthaler suspects there will not be much left after the new staff, the offices to house them and the computers for them to work on have been paid for.
It is also an open question how Berlin’s hotly contested hotel market will cope. The city’s tourism office Visit Berlin declines to comment – it is after all a senate agency – but its head, Burkhard Kieker, has in the past come out against additional burdens on the hotel sector.
‘Berlin’s is probably the most competitive hotel market in the world,’ Kieker has said, pointing to the 120,000 beds and new hotels coming on stream all the time.
Hotel operators will take differing approaches, in the view of Thomas Lengfelder, head of the city’s hotel and restaurant association, with the bigger companies absorbing the costs, while the traditional family-run establishments are forced to pass it on.
‘The bed tax will kill off the mid-sector operators. We will fight this with everything we’ve got,’ Lengfelder says.
Germany’s courts have taken differing approaches to legal appeals, depending on the wording of the legislation in the individual states.
For example, the tax was legally blocked in Munich, where 2.50 euros was set per night, but it has cleared legal hurdles in smaller cities like Erfurt and Trier. A ruling is still pending in Cologne, where the hoteliers have objected.
Berlin tried to introduce a tourist tax in 1994 but failed. Now the senate, where coalition negotiations are still underway following elections in September, seems set to try again. The main parties appear to agree on one thing: income from the tax should go straight back into the tourist sector.
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