Greek Hotel Industry Raises Concerns Over New Fee in Vari-Voula-Vouliagmeni

Photo source: Municipality of Vari-Voula-Vouliagmeni

The Municipality of Vari-Voula-Vouliagmeni has decided to implement a new 12-year “special local sustainable development fee” on businesses within its jurisdiction, sparking concerns among hotel owners and representatives of the tourism sector.

Approved by the municipal committee on December 16, the fee is intended to fund infrastructure projects aimed at promoting sustainable development and improving the area’s overall quality of life. The decision was based on a Deloitte study, which highlighted the expected benefits of these projects for residents and businesses alike. The proposal will now be forwarded to the municipal council for final approval.

Fee structure and implementation

The fee varies by business type:

– Hotels: 12.60 euros per square meter of built-up area.
– Catering and entertainment businesses: 8 per square meter.
– Commercial businesses: 1.10 euros per square meter for areas exceeding 100 square meters; 0.45 euros per square meter for smaller areas.
– Residential properties: 0.45 euros per square meter, with exemptions for vulnerable groups, including individuals with disabilities.

The fee is set to take effect on March 1, 2025 and will remain in place for 12 years.

The luxury Four Seasons Astir Palace Hotel Athens is just one of the hotels located in Vouliagmeni.

Industry reactions and legal challenges

The fee has drawn criticism from the hospitality industry, with representatives describing it as an additional levy that places undue financial strain on businesses. Tourism organizations, including the Athens-Attica & Argosaronic Hotel Association and the Hellenic Hoteliers Federation, are reportedly exploring legal avenues to challenge the decision.

The hospitality sector has also raised concerns about the municipality’s decision to increase the stayover duty rate to 0.75 percent of turnover, enabled by a legislative amendment introduced in September.

Broader tax burden on Greek hotels

A recent study released by the Institute for Tourism Research and Forecasts (ITEP) highlights the disproportionately high tax burden faced by Greek hotels. According to the study:

– Taxes account for 19.1 percent of hotels’ total production costs, nearly double the 10.2 percent average across other industries.
– Hotels distribute 44 percent of their income to other sectors of the economy, compared to 28 percent for other industries.

“The high tax burden and unequal treatment are evident,” said ITEP President Konstantina Svinou commenting on the findings and the inequities faced by hoteliers.

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

“At the same time, the hotel industry significantly supports the broader economy, distributing income to other sectors at nearly twice the average rate,” Svinou highlighted. “Hoteliers also contend with rising costs, including the climate resilience fee, higher stayover duty, and municipal charges.”

ITEP’s 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.