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Hotel and Restaurant Association chief doubts wisdom of tourist tax

Tallink Hotel in Tallinn.
Tallink Hotel in Tallinn. Source: Postimees/Scanpix

Chair of the Estonian Hotel and Restaurant Association (EHRL) Verni Loodma has said that a tourist tax would not have a positive impact on Tallinn's competitiveness.

Mihhail Kõlvart (Centre), Tallinn City Council chief reiterated his desire which he had first expressed last Noveber for imposing a small levy on tourists which could bring in several million Euros to city coffers even if it was of the order of around a euro per person, per night. These funds could then be ploughed back into the city in improvements to infrastructure, old town renovations, marketing etc.

"In the case of a tourist tax, what must be considered is what it would do to our competitiveness, because no additional tax has a positive impact in that regard,'' said Verni Loodma to the Baltic News Service.

''Particularly in circumstances we have now where, for example, the number of Finnish tourists coming to Tallinn is declining, the message to the outside world that Tallinn is implementing an additional tax is not the kind of news that would reverse that situation," Mr. Loodmaa went on.

Tax brings costs of its own

According to Mr. Loodmaa, it is also unclear what the costs of collecting such a tax would be, since it is clear that it would at least result in additional administrative costs for entrepreneurs as well as Tallinn city.

"We have the almighty 'sharing economy' at the moment and so it has to be also considered how the money would be collected from home accommodation,'' he said, referring to services such as AirBNB where homeowners let out their properties for short term visits.

''Riga, for instance, has forgone the idea of implementing a tourism tax as these additional costs would have been so high," Mr. Loodmaa added.

"If any such tax is to be collected, the money should go straight into the tourism infrastructure or tourism marketing for sure, but the tourism industry should definitely win from it in the long run,'' he went on.

''My position is very clear ‒ we are not ruling out the possibility of implementing such a tax, but all the details would need to be weighed very carefully beforehand," he added.

According to Mr. Loodmaa, it should not be overlooked that tourists also keep an eye on their costs and that Tallinn is competing with neighbouring capitals and other cities.

The EHRL has over 200 member hotels and similar organisations and accounts for over 60% of accommodation booked in Tallinn, according to the association's website.

Editor: Andrew Whyte

Source: BNS

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