FROM FISCAL OPPORTUNITY TO GOVERNANCE RISK: MAKING TOURISM ACCOMMODATION TAXES WORK FOR SUSTAINABILITY

Accommodation taxes are spreading rapidly across tourist destinations, creating a significant opportunity to address the environmental and social pressures of tourism. When well designed, these taxes can fund ecosystem restoration, affordable housing, climate adaptation, and improved resident well-being, strengthening the social licence for tourism. However, this opportunity is conditional: as accommodation taxes mature, revenues are increasingly used to finance routine public functions that would normally fall under core government budgets, while being re-labelled as “sustainable tourism” spending—thereby legitimising continued tourism growth without addressing its underlying social and environmental pressures. Their effectiveness depends less on how much money is raised than on how it is governed. Clear purpose, transparency, citizen participation, and alignment with limits on growth are essential if accommodation taxes are to support genuine sustainability rather than institutionalised greenwashing.