How Tax Hikes Are Undermining Greece’s Tourism Growth, As Countries Like Italy, Spain, Croatia, And Portugal Thrive With More Attractive Tax Policies

Published on October 25, 2025

Greece’s tourism industry, erstwhile a powerhouse successful Southern Europe, is now facing important challenges arsenic caller taxation hikes frighten to undermine its growth. While countries for illustration Italy, Spain, Croatia, and Portugal are thriving by offering much charismatic taxation policies that promote finance and tourism, Greece’s expanding taxation burdens are making it little competitive. These countries person strategically lowered taxes to pull visitors and boost nan section economy, creating a much favorable situation for businesses and travelers alike. In contrast, Greece’s rising taxes are putting unit connected some businesses and tourists, perchance stunting nan maturation of a assemblage that is captious to its economy. This displacement successful taxation argumentation crossed Europe highlights nan request for Greece to reconsider its attack if it hopes to support its position arsenic a starring destination successful nan Mediterranean.

Despite Greece’s caller advancement successful improving its wide firm taxation competitiveness, nan aforesaid cannot beryllium said for its tourism sector. The operation of precocious VAT rates connected accommodation, nan caller “Resilience Fee,” and steep non-wage labour costs has made operating a edifice progressively expensive, peculiarly for mid-range and high-end properties.

Research conducted by INSETE, nan investigation limb of nan Greek Tourism Confederation, shows that Greek hotels are burdened pinch heavier taxation than their counterparts successful different Mediterranean destinations, including Italy, Spain, Croatia, Turkey, Cyprus, and Portugal. These excessive taxation pressures are hurting galore smaller businesses, peculiarly those successful less-visited regions, and contributing to a shortened tourism season. The higher operating costs, driven by taxes, are forcing galore hotels to raise their prices to enactment afloat, further affecting their competitiveness.

Despite Greece’s wide emergence successful firm taxation competitiveness, which now ranks 3rd globally (up from sixth successful 2015), nan tourism assemblage lags behind. When focusing solely connected business-related taxes, Greece ranks fifth, and it drops to 4th erstwhile considering investor taxes. This spread highlights a important issue: Greece’s tourism assemblage remains overtaxed comparative to nan remainder of nan economy. While Greece has made important strides to heighten its wide business environment, its tourism assemblage has not benefited from nan aforesaid reforms.

The study indicates that Greek hotels’ net earlier taxes, interest, and depreciation (EBITDA) only screen 56.9% of their taxation and societal information costs. This is simply a stark opposition erstwhile compared to Portugal’s 111.9% and Cyprus’s 171.1%. To lucifer nan profitability levels of Cypriot hotels, room rates successful Greece would request to summation by astir 46%. This business has raised concerns astir nan sustainability of nan manufacture and its expertise to proceed driving economical maturation for nan country.

Aside from precocious taxation, Greece’s tourism assemblage is besides plagued by its business complexity. According to nan 2024 world scale from TMF Group, Greece ranks arsenic having nan highest level of business complexity successful nan world. Regulatory and compliance costs, which are straight tied to nan country’s bureaucratic processes, proceed to erode competitiveness. The World Economic Forum further underscores these challenges, ranking Greece’s tourism business situation a disappointing 52nd globally. This ranking suggests that Greece’s tourism manufacture still faces important barriers to growth, peculiarly successful comparison to different countries that person streamlined their processes and reduced unnecessary regulations.

The preamble of nan “Climate Crisis Resilience Fee” successful January 2025, which replaces nan erstwhile overnight enactment tax, only exacerbates these issues. The fee, group astatine a level per-night charge, applies uniformly crossed nan country, moreover though it has been adjusted seasonally successful immoderate regions. This argumentation disproportionately impacts lower-cost hotels, particularly successful destinations pinch weaker demand. Smaller hotels successful little celebrated areas are emotion nan effects of nan caller fee, which is making it harder for them to compete against larger, much established properties. As a result, this taxation summation threatens to widen nan spread betwixt regions, pinch nan astir affected being section economies successful less-visited areas.

The broader effect of these policies is not conscionable economic; it besides has nan imaginable to harm Greece’s world competitiveness successful nan tourism sector. High operating costs, driven by taxes and analyzable regulatory requirements, make it harder for Greece to pull and clasp tourists, peculiarly those looking for much affordable options. This is successful opposition to different Mediterranean destinations that person successfully created much tax-friendly environments for tourism-related businesses, offering competitory advantages that Greece cannot presently match.

In position of location tourism, nan effects of these caller taxation structures are particularly evident. While Greece continues to spot dependable maturation successful world visitant numbers, this maturation is progressively concentrated successful awesome tourer hubs for illustration Athens, Santorini, and Mykonos. Smaller, less-visited regions struggle to support dependable tourism flows, pinch galore businesses forced to raise prices aliases trim services to header pinch expanding taxation burdens. The emergence successful nan Resilience Fee has compounded these challenges, peculiarly successful areas pinch much seasonal aliases niche tourism markets. These regions now look further hurdles, arsenic visitors are often deterred by higher accommodation costs.

To compete efficaciously successful nan world tourism market, Greece needs to reside its tourism-related taxation issues. While nan country’s wide business situation has improved, nan tourism assemblage remains a anemic link. By revising taxation rates, peculiarly nan VAT connected accommodation and nan Resilience Fee, Greece tin make its tourism assemblage much charismatic to investors and business owners. Streamlining regulatory procedures would besides thief trim nan complexity that presently burdens nan industry, allowing businesses to thrive.

Greece’s rising taxation hikes are stifling its tourism growth, while neighboring countries for illustration Italy, Spain, Croatia, and Portugal thrive by offering much charismatic taxation policies that promote finance and tourism.

while Greece has made important advancement successful improving its firm taxation competitiveness, its tourism assemblage remains overtaxed and hindered by regulatory complexities. The caller Resilience Fee and precocious VAT rates connected accommodation are placing an further strain connected nan industry, peculiarly smaller hotels successful less-visited regions. By reevaluating nan taxation and regulatory situation for tourism, Greece tin foster a much competitory and sustainable tourism sector, ensuring semipermanent maturation and profitability for its hospitality industry.