Nanak Flights Blog

The Tourist Tax – Yes or No?

We’ve all heard of the British holidaymakers who were charged £54 for gelati in Rome back in 2013. While some of us may have laughed at the tourists’ outrage, as they apparently ordered clearly-priced extra-large ice creams, there is a definite two-tier tariff in many cities and countries. Locals get mates’ rates while tourists pay extra – the so-called Tourist Tax.

In some parts of the world it’s relatively subtle; some cafés in Belgium charge tourists an extra 10% for their chips, for example. Other parts of the world, however, can charge tourists double or more for entrance to landmarks and attractions.

Is it exploitative or entrepreneurial?

When regular travellers get together to swap tales, they often mention how much extra they have to pay for meals, for accommodation or for entrance fees to attractions. Some find it annoying, deceitful (or baldly cheeky), while others don’t mind paying a surcharge because they want to help the local economy.

Often, it comes down to how much the extra charge is and what the exchange rate with the visitor’s home currency is. If the tax amounts to mere pennies, then most tourists won’t even think about it. If it’s amounting to tens of dollars, on the other hand, then it can backfire and put people off.

Get the balance right, though, and that extra little bit on top can make all the difference to the areas – and the people who live in them – in less-affluent countries. Tourism is a major industry in many parts of the world, especially India, and if people are flocking into a country from wealthier nations, they bring their money with them.

Trillion-dollar tourism

Globally, tourism is worth a total of almost US$8 trillion. The United Nations World Tourism Organisation predicts that 1.8 billion international tourist arrivals will happen annually by 2030; already we see that one in ten jobs around the world relies on tourism either directly or indirectly. That means that almost 300 million people around the world need holidaymakers to make a living and to contribute their collective 10% to the world’s GDP. It only seems fair, in that case, to redistribute some of that wealth.

The world doesn’t seem to mind

When Thailand’s government announced that it planned to raise the entrance fees for its national parks it made it clear that these price hikes would only apply to “foreign adults and children”. The two-tier charges came into force in February 2015.

While this big price differential might seem unfair to people who have just travelled at least partway around the globe to relax, you have to think ahead and beyond. If the locals in a tourist area had to pay the same price as tourists then they almost certainly wouldn’t be able to afford to see their own heritage sites! In addition, the prices of other amenities in the area would start to rise and locals would simply be priced out of their homes and neighbourhoods.

Ignore the guidebooks

You may well read guidebooks that remind you not to pay the first price you’re given, but you should stop and think before rejecting it out of hand. If the first price isn’t huge then just pay it. You could be helping someone to buy a house, put their children through school or to pay medical expenses. Your extra dollar or two won’t mean much to you but it’ll mean a lot to the shopkeeper or restaurant owner.

We all hear about how the world’s money and resources are distributed unevenly and unfairly, so by paying slightly over the odds in a poor area, you’ll be doing your bit to straighten things up.

It’s paying your way

The tourist tax is not just about the immediate impact of helping a café owner to improve their family’s life; a two-tier payment system, whether state-mandated or informal, is a good way to protect a country’s resources.

If bus-loads of tourists are arriving several times a day, day after day, into a city, to a landmark or to a natural park, this flow of humanity will have an impact. There’ll be less room for the area’s older industries or for farming, and the natural resources may also become depleted or (in the case of wildlife) move elsewhere, then the extra money will go a long way to compensating for this. It’ll also help local governments to preserve the environment so that tourists want to carry on visiting. Looking at the issue from this angle, it seems wrong not to pay that little bit extra.

Benevolent tourism is the way forward

Tourism isn’t a one-way street; it’s not about the locals taking money from the incomers. Holidaymakers need to realise and remember that they too are often taking resources away from the area or putting extra pressure on the environment and infrastructure. A seasonal spike in tourist numbers might be welcome economically, but it may also dominate the everyday life of the locals for a few months of each year.

By paying more than locals for the same amenities, or by giving generous tips, tourists are taking a moral stance and offering at least some redress for the impact they’ve made.

Can you end up being ripped off?

Of course, most tourist taxes are fair and go to good use; they also don’t sting too much, given the difference in income per capita between, say, India and Canada. The case of the gold-plated ice creams in Rome did highlight how some venues, shops and eateries do exploit their overseas customers, though.

The British family could have looked over the menu first, realistically and this particular incident is so well-known because it was so extreme. What’s harder to avoid in many parts of the world are outright scams and sob-stories to guilt tourists into giving donations to people who might not put the money to good use.

While you should expect some tourist surcharges when you visit India – in fact, you should proactively hand some money over – you also need to keep your wits about you. Do your homework and visit a few forums before you arrive so that you get a handle on the going rates for goods, meals, hotels and transport. This will help you to spot when you’re being ripped off, as well as to know all about the local “characters” before you actually get to meet them.

Is it a surcharge or the actual market rate?

Another argument for the tourist tax is that visitors aren’t paying extra, they’re paying the going rate. Locals pay less at the gates because they’re already paying taxes, working in the area, bringing up the next generation and doing their recycling. They deserve their generous discount, especially as they’ll still be there in the low season, looking after the place.

You might not even notice the tourist tax

Many tourists and holidaymakers don’t notice the surcharge, especially if they’re visiting India with an organised tour or they have a generous daily budget.

Sri Lanka’s Temple of the Tooth is free for locals to enter, but costs 1,500 Rupees (around US$20) for tourists and foreigners. For many tourists, this will simply form part of their daily expenses and some won’t even know that the local populace doesn’t pay anything. Most of the tourists who are aware won’t begrudge this, either.

To see the Taj Mahal you’ll probably pay US$15, but what an experience! You’ll be paying almost twice the amount that tourists from India’s neighbours will and 20 times the 40 Rupees that Indians will pay. Still – it’s the Taj Mahal!