TO TAX OR NOT TO TAX
How can Denmark maximise the economic, social, and cultural benefits of tourism while safeguarding our nature, cultural heritage, local communities, and addressing climate concerns? This is the central question explored in ‘Skat, Skat Ikke’ (eng: To Tax, or Not to Tax), a comprehensive new report by Group NAO that examines the potential role of tourism taxes both in Denmark and how it works internationally.
In recent years, the topic of tourism taxes has sparked heated debate—not only in Denmark but across Europe. Too often, this debate is reduced to a simplistic ‘for or against’ argument, overlooking important nuances. For instance, do we know for sure that tourism taxes always reduce demand for a destination? Or can they effectively manage visitor flow by season and location? Could tourism taxes offer a more sustainable funding model for DMOs, rather than relying primarily on state or regional budgets? And what can we learn from destinations that have successfully implemented these taxes – and from those starting to roll them back? Unfortunately, these critical questions are often overlooked, distorting the overall perception of tourism taxes and quality of the discussion.
‘Skat, Skat Ikke’ draws on international examples from cities like Austin, Milan, Barcelona, Amsterdam, Hamburg, and Edinburgh, where tourism tax revenues are reinvested into local communities, culture, and environmental protection. By leveraging these examples and various international studies, the report challenges traditional assumptions, presenting evidence that when properly implemented, tourism taxes do not stifle industry growth. On the contrary, tourism continues to thrive in destinations like Barcelona and Amsterdam, which have embraced taxation. With over 30 European countries already having implemented tourism taxes, the report argues that Denmark has the opportunity to introduce a balanced, responsible, and regenerative tourism strategy that benefits both visitors and locals, maximising the positive impact of tourism.´
To illustrate the potential, the report includes a simplified calculation showing that tourism taxes in Denmark could generate up to 1.45 billion DKK annually. This revenue could be reinvested in local development, nature conservation, and cultural initiatives—and, to put it in perspective, it is an amount 58 times greater than the new funding earmarked for tourism in the Danish Government’s 2024 National Tourism Strategy.
The report also explores specific areas where this new revenue could significantly enhance Denmark’s tourism industry. For instance, the funds could be used to improve infrastructure, making Denmark more accessible and enjoyable for tourists while easing the strain on local communities. These revenues could also help attract and host mega events that draw international attention and stimulate economic growth. Further investments could go towards protecting and preserving Denmark’s cultural and historical sites, ensuring they remain key attractions while safeguarding the country’s heritage—or even funding ambitious projects like a new national stadium. Additionally, the funds could support sustainable tourism initiatives, such as environmental conservation efforts in national parks or green transportation options in key tourist areas. The possibilities are vast and international examples from around the world show immense creativity in the scope of what tourism taxes can fund and contribute to.
In conclusion, ‘Skat, Skat Ikke’ aims to provide a fresh perspective on the future of Danish tourism, highlighting how tourism taxes – both in Denmark and abroad – can create better experiences for visitors, enhance the quality of life for locals, and support the sustainability of destinations. Whether through revitalising urban experience sectors or providing critical funding to rural and coastal communities, tourism taxes have the potential to shape a more balanced and prosperous tourism industry.
Please note: The report is currently available in Danish only
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