Study: Determining the willingness of to pay a tourist tax

The study aims at determining the willingness to pay a tourist tax and examining its influencing factors. For this purpose, the authors of the study analyzed 428 questionnaires in which tourists in Istanbul indicated how much they would be willing to pay in three different scenarios - protection of cultural heritage, preservation of local welfare and protection of nature.

Looking at the larger context, the scholars note that tourist taxes find increasing application around the world. Especially in many economically weak countries, such taxes often represent a significant share of states’ overall tax revenue. It is widely agreed that tourist taxes are an effective tool to internalize the environmental and social costs of tourism in the destination. Additionally, such taxes can distribute the benefits of tourism more equitably.

They find that the willingness to pay depends on socio-demographic factors such as age, gender, employment status or income, as well as on respondent’s knowledge of the tax and their travel behavior. For example, the fact that respondents had a financial income increased their willingness to pay, yet the amount of income had no significant effect. In addition, the researchers found the highest willingness to pay when the tax was destined to protect cultural heritage. For the preservation of local welfare, they found less willingness and respondents were least willing to pay for environmental protection. This however, might be attributable to the fact that the study was conducted in Istanbul, which is a cultural tourism destination. Most importantly, the study finds that transparency increases the willingness to pay: When people know what they are paying for, they are more willing to do so.