Image: © Amnesia Ibiza via Flickr

Is Ibiza’s new tourist tax scaring away Brits?

Woah, we're not going to Ibiza

A new Ibiza tourist tax is being blamed for making Brits shun the Spanish island.

What it means: Hotel owners in Ibiza are begging their government to get rid of an eco tax that was introduced in 2017 and doubled this year. The tax, which is supposed to offset the environmental damage tourists do to the island, costs visitors to Ibiza €2-€4 a night. The hoteliers call it “discriminatory and seriously damaging” and say it’s a big part of the reason Ibiza had fewer tourists and received £24 million less from tourist spending this year.

Tourism is super important to Ibiza’s economy - 75 percent of people living there get their income from it. A tax that turns people off visiting or makes tourists spend less in Ibiza could therefore end up making locals poorer or upping unemployment.

But it might not be the tax that’s causing the dip in tourism in Ibiza (after all, paying €28 in tax for a week’s stay is less than many visitors pay for a single entry to one of Ibiza’s famous nightclubs). A bigger problem might be that a lot less Brits are holidaying there - because Brits make up more than a quarter of all Ibiza tourists. British tourism in euro-using countries has gone down since the Brexit vote caused the pound to become worth less compared to the euro, which made holidays abroad more expensive. (For an explainer on how currency exchange rates work, click here.)

Ibiza hoteliers might therefore solve their problem by encouraging more tourism from countries other than Britain. (And tbf, fewer Brits around might be a selling point for some). But lots of locals would like there to be fewer tourists around in general - hundreds of them have taken to the streets to protest about the bad parts of having lots of tourism: noise, litter, environmental damage, rising rents and more crime. For them, a tax that turns some tourists away and helps pay for the damage done by those who stay is a great idea.

Read our explainer on the good and bad sides of economic growth.

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