Yes, taxes can grow the destination!

Tourism taxes have often been framed as punishment for popularity, a price to pay for overtourism. But Group NAO’s Tourism Taxes by Design turns that notion upside down. It is often debated if tourism taxes have any measurable effect on demand. But even if they could, what if taxes could do more than just regulate visitor numbers? What if they could regenerate the very cities, cultures, and environments that make travel meaningful? As cities across Europe rethink how to fund recovery and resilience, NAO’s white paper offers a bold new playbook for tourism that gives back more than it takes.

Before COVID-19, 2019 had already been called “The Year of Tourism Taxes”, as destinations from Venice to Amsterdam introduced levies to manage rising visitor pressure. Then, the pandemic arrived, bringing undertourism, falling revenues, and a new understanding of how vulnerable destinations can be. The crisis changed the question from “how do we slow growth” to “how do we build back better.” In this new context, tourism taxes have emerged as a tangible tool for creating a more balanced and resilient visitor economy. Numerous case studies from places like Barcelona, the Balearic Islands, and Iceland showed how tax revenues can finance cultural restoration, environmental protection, and social inclusion.

Against this backdrop, Tourism Taxes by Design doesn’t advocate for or against taxation; it reimagines it. It asks policymakers, industry leaders, and communities to design with purpose and transparency. And fairness. In an age of both overtourism and undertourism, the paper invites destinations to treat taxes not as a restriction, but as a possibility.

Get access to the paper below.