Amsterdam Taxes Tourism, But Isn't Tackling It

The new Amsterdam coalition has presented its agreement. After months of pressure from supporters and opponents of the city's current tourism policy, the big question was how this issue would be addressed.

The first thing that stands out is this: in a city struggling under the weight of mass tourism, the word "tourism" appears just four times across seventy pages. "Tourist tax", seen by supporters as the main tool for easing the pressure, fares only slightly better with six mentions. There is no real vision on the topic at all.

On page 33, we simply learn that the tax will rise from 12.5% to 16% in 2027, then increase by one percentage point each year until it reaches 20%. This gives Amsterdam the world's highest rate. That was technically already true at 12.5%, and at 20% the city moves into a category of its own. The justification given is that it will "let visitors contribute more to the city". In the section on costs, the coalition adds that this fulfils "the council's regulation".

That regulation is Toerisme in Balans (2021), in which the council set a cap of 20 million overnight stays per year, a target it has missed for years. This is exactly where the plan falls apart. Meeting the regulation would mean that a 20% rate brings the number of overnight stays below that cap. With 22.9 million stays in 2024 and an expected 23.7 million in 2025, that is simply not realistic. A fifteen percent drop would be enormous, and the concerning part is that politicians know this too.

In 2023, the tax department commissioned research into the price elasticity of the tourist tax, looking at how much the rate would need to rise to achieve a given effect. In the most favourable scenario, with price sensitive visitors, a 30% rate would bring the number of tourists down to 18 million. The base case scenario points to a rate of 40 to 45%. And in the least favourable scenario, where numbers barely respond, even 60% would be needed.

Which scenario is realistic? Practice gives us the answer. After the rate rose from 7% to 12.5%, tourists kept coming, and in growing numbers. That lack of sensitivity points clearly toward the inelastic end, closer to 60%. Either way, 20% is clearly not enough. The line "this fulfils the council's regulation" is written far too easily, and shows little grasp of reality.

So what does the increase actually achieve? For visitor numbers, little to nothing. And for the tourists who do stay away, the same research shows that around half simply move to a hotel in the region, in Haarlem or Zaandam, and commute into the city every day. Crowding in the city centre barely changes, while the tax revenue itself leaks away to neighbouring municipalities. This is the waterbed effect.

What it does fill, considerably, is the municipal treasury. The projected extra revenue of 60 million euros, growing by 5 million for each additional percentage point, looks conservative if anything.

In 2024, the tourist tax brought in 284.6 million euros. For 2026, the municipality has budgeted 275 million, a notably cautious figure given that 2024's revenue was already almost 10 million higher. With 22.9 million overnight stays and a 12.5% rate, that points to an average overnight price of just under 100 euros in 2024.

If we apply that same 100 euros to the 23.7 million visitors expected in 2025, a 16% rate in 2027 would already bring in around 380 million euros. Yet the coalition's budget for that year only assumes 275 million plus the projected 60 million in extra revenue, a total of 335 million. To land on that figure, either the average overnight price would have to drop to around 88 euros, or the number of tourists would have to fall to 20.9 million. Given the data of recent years, both outcomes are completely unrealistic. It is far more likely that prices stabilise, squeezing margins in the hospitality sector, that tourist numbers keep rising slightly, and that revenue overshoots the budget altogether. My estimate is somewhere around 400 to 450 million euros by 2030.

There is nothing wrong with tax revenue in itself, especially not in a city facing so many challenges. The problem is that the coalition gets no further than stating that it fulfils "the council's regulation", instead of explaining how all that extra money will actually contribute to "the facilities visitors use" and to "necessary investments in the city". A credible plan for measures that genuinely reduce tourist numbers has not even begun to be written.

That puts the municipality in a risky position. Given the public pressure, this is realistically its one chance to develop policy that actually tackles overtourism. A flat tax increase does not qualify. It undermines the credibility of the municipality, and above all exposes its inability to act and its lack of vision on this issue.