The Greek government has unveiled a strategic initiative to foster climate resilience and facilitate reconstruction in response to the catastrophic forest fires and floods that ravaged the country. Central to this initiative is introducing a novel climate resilience levy, an accommodation tax slated to take effect this month. This levy represents a pivotal element in the government's comprehensive plan to generate essential funds, which are earmarked for supporting vital reconstruction endeavours and bolstering the nation's resilience against climate-related adversities.

As reported by the Greek Reporter, this newly instituted tax will directly impact tourists, who will now encounter an increment in their accommodation expenses. According to SchengenVisaInfo.com, this tax is designed to be seasonal, coming into effect during the peak tourist season spanning from March through October.

Financial Implications and Governmental Response

The structure of this levy is meticulously calibrated, with rates varying following the official classification of the lodging facilities. Specifically, the tax ranges from €1 to €4 per night, contingent on the establishment's rating. To illustrate, guests opting for more modest accommodations such as apartments or one to two-star hotels will incur a tax of €1.50 per night. Those staying in three-star hotels will be subject to a €3 tax, while patrons of four-star hotels will pay an additional €7. In luxury, tourists visiting opulent five-star hotels will be levied a €10 tax per night.

This tax is distinct because it is not included in the prices quoted by travel operators or agents. Instead, it is a separate charge that tourists must pay locally, in the local currency.

The implementation of this tax has not been without its detractors. Grigoris Tasios, the President of the Panhellenic Hoteliers Association, has voiced significant apprehension regarding the potential ramifications of this tax hike on the tourism industry. Tasios is concerned that the increased financial burden may deter potential tourists from selecting Greece as their holiday destination. Such a scenario could have a pronounced negative impact on the nation's tourism rates and overall revenue.

Off-Peak Season Adjustments

However, it is noteworthy that during the off-peak season, which runs from November to February, the climate resilience levy will revert to the levels of the preceding bed tax.

The fiscal implications of this new levy are considerable. The Greek government anticipates yielding an additional revenue stream of approximately €300 million in 2024, effectively doubling the special reserves budget. It marks a significant shift from the previous accommodation tax regime, as the new climate tax will also encompass short-term rentals booked online.

With this increase, the special reserves are projected to surge from €300 million to a substantial €600 million by 2024. Prime Minister Mitsotakis has acknowledged this development, emphasising the nation's steadfast commitment to achieving its fiscal objectives, even in the face of the severe economic challenges that have emerged in the aftermath of the recent natural disasters.

Tourism Boom Amidst Natural Disasters

Greece's recent history has been marked by severe climatic events, with the devastating flooding in September last year. This calamity resulted in seventeen fatalities, extensive infrastructural damage, and significant economic repercussions. The government estimated the cost of repairing the railroads alone to exceed €150 million.

Despite these adversities, Greece's tourism sector has demonstrated remarkable resilience, experiencing a significant upsurge in international air arrivals. Between January and October of the previous year, the country recorded over 23 million arrivals, surpassing the figures for the corresponding period 2022. This trend was further corroborated by the Greek Tourism Confederation, which reported an additional 2.4 million arrivals in the first ten months of the previous year, representing a 12 per cent increase compared to the levels observed before the pandemic.