Destination taxes bump up holiday prices

Holidaymakers to the Maldives and Kenya are facing increased prices as their governments introduce and raise taxes.

A goods and service tax of 3.5% will be levied in the Maldives from January 1, 2011. It will be added to all hotel prices, including rooms, drinks and food as well as any excursions and trips booked through the hotels.

Nikki Hain, product manager at Premier Holidays, said many hotels were trying to absorb the cost rather than pass it on, but she added that it would still have an effect on prices.

“It seems a bit strange that the government would introduce a tax when many hotels and destinations are reducing prices to encourage business,” she said.

Meanwhile, it is believed that Kenyan authorities are planning to double entry visa fees from $25 to $50, and remove exemptions for children aged 16 and under on January 1, 2011.

A spokeswoman for the Kenya Tourist Board defended the decision, saying the increase was a return to pre-2008 levels when fees were reduced to encourage visitors back to the country following political riots.

Ash Sofat, chief executive of Somak Holidays, said: “Everything is becoming more expensive in Kenya and it is becoming a lot more uncompetitive.”

In Europe, Austria looks set to follow Germany by introducing a ‘green’ air tax, similar to APD in the UK.

From next year passengers will be charged €8 for European and €40 for long-haul flights departing from Austrian airports.

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