Berlin Sees Surge in Revenue from Accommodation Tax: Tourists and Business Travelers Contribute Millions

Berlin is experiencing a significant increase in revenue from its accommodation tax, known as the City Tax. In 2024, the total tax collected from hotels reached a record EUR89.6 million, up from EUR58.7 million the previous year. This remarkable growth is attributed to the removal of an exception for business travelers, effective April 1, 2024, which now requires all guests, including those traveling for work, to pay an additional 5% tax on their hotel bills.

The monthly data reveals a substantial rise in tax income starting in May 2024, with the highest monthly revenue recorded in October at EUR13.2 million, followed by EUR11 million in July, and EUR10 million in November. For the ongoing year, the Berlin Senate anticipates further increases, projecting revenues from the accommodation tax to reach EUR137 million.

As of January 2025, the tax rate was raised to 7.5%, making Berlin's accommodation tax the highest in Germany. Only Dortmund and Flensburg charge the same percentage. The City Tax is levied on each overnight stay, and while it is not mandatory for hotels to pass this cost onto guests, it is common practice for them to do so.

The introduction of the tax in 2014 has been met with criticism from the hospitality sector, which views it as a challenge. The inclusion of business travelers in the tax scheme and the recent increase in the tax rate have sparked concerns within the industry that higher prices may deter potential visitors.

Despite the surge in tax revenue, the overall number of tourists in Berlin has stagnated in recent years. Although the city has recovered from the pandemic lows, tourism numbers are still significantly below the peak levels of 2019, when 13.9 million visitors recorded 34.1 million overnight stays. In 2024, the city welcomed 12.7 million visitors, resulting in a total of 30.6 million overnight stays. The impact of the City Tax on these figures, as well as any shifts in travel behavior, remains to be fully understood.