Greek Hotel Competitiveness Threatened by Escalating Taxes, Says Hoteliers Federation

The escalating tax burden on hotels and tourist accommodations is undermining the competitiveness of Greek hotels and, by extension, Greek tourism, according to the Hellenic Hoteliers Federation.

In an official letter addressed to the Greek Minister of Economy and Finance, Kostis Hatzidakis, and Tourism Minister Olga Kefalogianni, Federation President Yannis Hatzis highlighted the adverse impact of taxes and fees on Greek hotel pricing.

Specifically, Value Added Tax (VAT), the Climate Resilience Fee, and the Stayover Duty are driving up room costs significantly compared to other popular destinations, diminishing Greece’s appeal as a tourist destination.

Hellenic Hoteliers Federation President Yannis Hatzis.

The hoteliers federation reinforced these concerns in its comments on the draft law titled “Measures to Increase Income, Tax Incentives for Innovation and Business Transformations, and Other Provisions”, which is under public consultation until November 19.

Tax burdens are higher in Greece

Using a practical example, the federation explained that for a nightly rate of 200 euros, combined taxes and fees total 42.5 euros, equivalent to a 21.3 percent surcharge. This positions Greece among the highest-taxed destinations in Europe, comparable to Paris. In contrast, competitive destinations such as Italy (10-15 percent), Spain (7-14 percent), Turkey (12 percent), Portugal (4-8 percent), and Albania (7 percent) impose much lower tax burdens, as outlined in the Federation’s letter.

Source: Hellenic Hoteliers Federation

Moreover, Hatzis noted that the Climate Resilience Fee and the Stayover Duty are not calculated based on room prices. “This creates disparities, as room rates can vary significantly within the same category or even within the same property, depending on the season,” he said.

For example, guests at a five-star hotel paying 100 or 150 euros per night are subject to the same fees as those staying in accommodations charging over 1,000 euros per night.

According to the federation, during low-demand months like April or October, when luxury hotels may offer rooms for as little as 50-60 euros, the Climate Resilience Fee can add an extra 25-30 percent to the cost, further burdening travelers.

Impact on hotels and tourists

The federation highlighted that “such fees negatively affect the competitiveness of Greece’s hotel sector” and efforts to extend the tourist season. “Greek consumers, already strained by inflation and high living costs, are disproportionately affected by these additional charges.”

Furthermore, travelers often lack clarity about the purpose or benefits of the Climate Resilience Fee, which is framed as addressing the “climate crisis” — a responsibility that extends beyond the tourism sector to the entire Greek economy.

Hatzis also criticized the rapid escalation of the Climate Resilience Fee, introduced in early 2024 and increased by up to 70 percent within its first year, depending on accommodation type.

Where is the revenue going?

In the letter, Hatzis pointed out that in 2023, revenues from the Stayover Duty amounted to 134 million euros, while the Climate Resilience Fee generated 202 million euros. Government projections estimate this figure will rise to 405 million euros by 2025. Despite these substantial contributions to government finances, Hatzis questioned the absence of a clear strategy or study outlining how these funds will address the climate crisis.

By contrast, the federation pointed to the recently introduced Cruise Passenger Levy, where the government has specified how revenue will be allocated. Hatzis suggested that similar transparency and strategic direction are needed for the Climate Resilience Fee. He proposed that revenues could be used to fund energy-efficient building upgrades, investments in renewable energy, and the development of green urban infrastructure.