Tourists in the Netherlands spent more than ever before in 2023 at over 100 billion euros, Statistics Netherlands (CBS) has reported. However, the country could experience a drop in expenditure thanks to the planned VAT increases for many recreational activities.
Dutch tourists spent the most in the Netherlands
In 2023, tourists in the Netherlands spent almost 13 billion euros more than they did the previous year. A total of 105 billion euros was spent on Dutch tourism - more than has ever been recorded in the Netherlands.
People living in the Netherlands contributed the most to the Dutch tourism industry, spending 65,17 billion euros, while around a third of tourist spending was attributed to tourists from other countries (34,48 billion euros). The remaining 5,28 billion euros is categorised under “durable goods and expenditure” which includes goods that can be used again such as the increasingly popular camper vans.
VAT to increase to 21 percent for Dutch hotels
Earlier this year, the Dutch government announced its plan to increase the VAT on a variety of goods and services, including books, concerts, museums and other attractions. Accommodation is another service that would be affected by the VAT hike from 9 percent to 21 percent.
According to ABN Amro, the government has estimated that the VAT increase would generate 910 million euros in tax revenue based on the 6,8 billion euro turnover reported by hotels in 2022. However, according to experts at the Dutch bank, it would be closer to 285 million euros - almost two-thirds less than expected.
Less tax revenue from hotels than expected
While the cabinet accounted for a slight decrease in hotel turnovers due to the tax hike, there are a few things that it might not have included in its calculations, according to ABN Amro. There will be fewer overnight stays in the country when the prices increase due to the higher tax, resulting in less profit for hotels and therefore less profit tax. A large portion of hotel guests also travel for business (40 percent) which means companies can reclaim VAT.
"Hotels also generate turnover from the rental of rooms, parking spaces and food. The intended VAT increase does not affect these additional turnovers," said Stef Driessen, a researcher at ABN Amro. When taking all this into account, the VAT increase will actually only affect 34,8 percent of the total hotel turnover, bringing in a lot less tax revenue than the 910 million that the government plans for.
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