Bank warns loss of tourism trade undercuts expected revenues of accomodation 2026 VAT rise to 21%
The Dutch bank, ABN Amro, has challenged the Dutch government’s decision to increase VAT from 9% to 21% for hotels, holiday parks, and other sectors, suggesting that the policy may backfire economically.
The government expects to raise €1.2 billion annually, primarily from hotels, but ABN Amro claims these estimates are flawed. Hotels generate over a third of their sales from activities unaffected by the VAT hike, such as food, beverages, and rentals, meaning that the government will likely fall short of its revenue target. Additionally, 40% of hotel guests are business travelers who can recover VAT, further reducing the forecast take.
ABN forecasts the VAT reclassification will raise only €285 million, far below the projected €910 million. Hotels, which operate on slim profit margins, may absorb some of the tax increase, reducing their profitability and corporate tax contributions. The policy could lead to losses for hotels already struggling from past economic downturns, thereby shrinking overall tax revenues.
Read more in our Dutch VAT guide.
Loss of tourism spend hits over VAT revenues
The VAT increase could also trigger a chain reaction across related sectors like restaurants, shops, and attractions, causing a wider economic impact.
In Amsterdam, the combined effects of the VAT and tourist tax hikes may significantly reduce hotel stays, especially from business travelers, exacerbating the city’s financial losses. Moreover, the tax burden disproportionately affects lower-income citizens, as rising hotel prices may deter domestic tourism. ABN Amro warns that the broader economic consequences have been overlooked, potentially leading to reduced tax revenues overall.
