Study: Greek Hotels See Higher Tax Burden Compared to Other Sectors

Photo © Greek Travel Pages (GTP)

Hotels in Greece face a significantly higher tax burden than other sectors of the economy, with net taxes accounting for 19.1 percent of total production costs, compared to an average of 10.2 percent across other industries.

This finding emerges from a recent study conducted by the Institute for Tourism Research and Forecasts (ITEP) in collaboration with Panteion University. Led by George Soklis, Assistant Professor at Panteion University, the study highlights the disproportionate tax pressures on the hotel industry and its implications for Greece’s tourism competitiveness.

Key findings

Using recent economic data and advanced analytical methods, the study provides detailed insights into the tax burden on hotel production costs and compares it with other economic sectors. The results show:

– Net taxes directly and indirectly contribute 19.1 percent of total production costs for hotels, nearly double the 10.2 percent average for other sectors.

George Soklis, Assistant Professor at Panteion University, presenting the data to journalists. Photo © Greek Travel Pages (GTP)

– Over the past decade, the share of taxes in hotel production costs increased by 14 percentage points, reaching 87.3 percent higher than in other sectors.
– Tax and insurance charges have risen to 23.5 percent of hotel production costs, up from 19.9 percent ten years ago. By contrast, other sectors experienced a smaller increase, with the corresponding figure at 15.6 percent.
– The hotel sector distributes 44 percent of its income to other industries, nearly double the 28 percent distribution rate of other sectors.
– A significant 72.6 percent of net taxes tied to hotel production are borne directly by the hotel sector, up from 61.7 percent a decade ago.

Photo © Greek Travel Pages (GTP)

Industry challenges and implications

ITEP President Konstantina Svinou commented on the findings, emphasizing the unequal tax treatment of hotels compared to other sectors.

“The high tax burden and unequal treatment are evident,” Svinou said. “At the same time, the hotel industry contributes significantly to the broader economy, distributing income to other sectors at nearly twice the average rate.”

Svinou also noted that high taxation affects Greece’s tourism competitiveness, forcing hoteliers to either increase prices, which may deter visitors, or absorb the costs, jeopardizing their financial sustainability.

ITEP President Konstantina Svinou. Photo © Greek Travel Pages (GTP)

“In addition, hoteliers face excessive costs, including increased climate resilience fee, higher stayover duty, and municipal charges. This is compounded by the lack of regulation in the short-term rental market, which creates unfair competition,” she added.

The study underscores the need for structural changes to ease the tax burden on the hotel sector, aligning it more closely with other industries. The findings also highlight the critical role of tourism in supporting Greece’s broader economy and the importance of fostering a fair and competitive environment for the sector to thrive.