Room Taxes, Spa Taxes, and ETIAS

Traveling in Europe or anywhere else has always involved spending a certain amount of money. But over the past decade or so a new kind of travel expense has arisen in Europe, including the German-speaking countries. And yet another, if modest, new European security authorization expense will probably make its debut in 2025.

Lodging/Room Taxes in Germany
Weimar was the first German city to introduce a lodging tax in 2005. But what really got the ball rolling was a change to Germany’s nationwide 19 percent VAT sales tax five years later. In 2010 the German parliament passed a law reducing the 19 percent VAT rate to only seven percent for hotel stays.

The spa town of Bad Nauheim, north of Frankfurt am Main, levies a “Kurbeitrag” spa tax of €3.30 per person per day. A family “Kurkarte” day ticket costs €6.60. The town is also is known for a famous resident named Elvis Presley, who lived in a house on Goethestrasse as a GI in the 1960s. Learn more about the German Kurtaxe below.

That tax shift helped reduce the total price of a hotel stay for tourists in Germany, but it also reduced the revenue that communities received from the tax. Soon they were looking for a way to close the income gap. Although a room tax is very common in the United States and many other countries, it was a new idea for Germany. As of now (October 2023), only about 40 German localities across Germany have a lodging tax. But there is increasing pressure to add more. Munich, for instance, currently has no room tax, but the prospect of 40 to 60 million euros of new revenue is tempting.

Room Tax: die Bettensteuer/City-Tax
The German terms used for these special taxes vary from place to place: Übernachtungsteuer (“overnight stay tax,” “room tax”), Bettensteuer (“bed tax”), Beherbergungsteuer (“hospitality/lodging tax”), and Tourismusbeitrag (“tourism contribution/fee”) are just four examples. The many different names also reflect the fact that there is no uniform approach to these occupancy taxes within Germany.

German cities and towns that charge a tax for overnight stays include: Berlin, Cologne, Darmstadt, Dortmund (7.5 percent), Dresden, Frankfurt am Main (€2 per person/night), Freiburg, Hamburg, Leipzig, Konstanz (5.6 percent), Wiesbaden, and Wuppertal. But there are many places, including Düsseldorf, Hannover, Heidelberg, Karlsruhe, Munich, and Stuttgart, that do not have any room taxes. Some cities with a room tax exempt business travelers (Berlin, Dresden, others). But, as we mention below, a German court decision in 2022 left it up each community to decide if they wish to apply the lodging tax to business guests.

You may have already paid a room tax in Germany or Austria, but not realized it – unless you carefully examined your hotel invoice. The tax is included in your room charge, a common practice also found in the US and other places. Switzerland does a bit better by usually making the room tax a separate charge.

Some cities and towns set the room tax as a percentage of the daily room charge, while others have a flat rate of two or three euros per person and night. On top of that, a few places, such as Hamburg, have a sliding scale, with a higher tax rate for more expensive accommodations.

Opposition to the Lodging Tax
The German hotel/hospitality industry’s trade group (DEHOGA) and the ADAC, Germany’s AAA and largest automobile association, both oppose room taxes by any name. However, in May 2022 Germany’s highest court not only ruled that the City-Tax or Bettensteuer was legal, but it also refused to block it for business travelers (who can still deduct it as a business expense). This big legal victory for room taxes means that even more German cities will adopt this attractive source of revenue in coming years. But in many German communities the room tax is a controversial issue, with heated debates over the pros and cons.

The number of places with a lodging tax is still outnumbered by an older special form of German room tax. There are about 160 communities that have long had a lodging tax by another name: the Kurtaxe or Ortstaxe.

This “Municipal Spa Administration” day ticket for Wiesbaden is date stamped “8. Sep” 1875. It cost 50 pfennigs. Note the old German C-spelling rather than the modern K-spelling in “Cur-Verwaltung.” PHOTO: Public Domain via Wikimedia Commons, from the Stadtarchiv Bad Soden (Taunus)

Die Kurtaxe (Spa/Resort Tax)
This type of lodging tax has a long history in Germany. Across Germany and Europe the Kurtaxe for popular Kur “cure” or spa resorts became common in the 19th century. Only German towns or localities with the official “Bad” (spa) designation are allowed to levy a special spa or resort tax. Indeed it should come as no surprise that the “badest” place in Germany, Baden-Baden (“Spa-Spa” or “Bath-Bath”), was the first to charge a spa tax, way back in 1507! By no later than 1842, the Austrian resort town of Bad Ischl also had an Ortstaxe, another term for Kurtaxe.

Today such spa or resort taxes are found all across Europe, including Austria, Germany, and Switzerland. Unlike a room or lodging tax, these spa taxes are (usually) specifically designated to improve the infrastructure and accommodation within the resort community. The flat-rate resort tax applies only to non-residents as a per-person levy per day of a stay in the resort location, payable in advance. Some communities also offer family rates or even annual rates. Children under the age of 14-18 (the age varies) are usually exempt, but there are some exceptions. A few spa towns charge for children aged six years or older. Beach towns often also charge extra for pet dogs.

According to Stiftung Warentest (as of 2016), the daily Kurtaxe varies from a low of €0.50 to a high of €3.50 (in Baden-Baden, Bad Kissingen, Borkum, etc.). Current rates may be higher. A minuscule number of resort locations choose to have no Kurtaxe at all (Bernkastel-Kues, Bispingen).

Austria and Switzerland
Just as in Germany, some Austrian and Swiss resort locations charge a daily Kurtaxe. The spa tax rate varies widely in Switzerland, from a low of 70 euro cents to a high of seven euros.

In non-resort places in Austria and Switzerland there’s a lodging/room tax called a Nächtigungsabgabe/Ortentaxe/Aufenthaltsabgabe, which is basically the same thing as the Bettensteuer in Germany. The room tax in Austria and Germany is usually a percentage of the nightly room charge that varies from 2.5 percent in Salzburg and Vienna, to 5 percent in Berlin and Cologne, or 6 percent in Dresden. But in Switzerland, the occupancy tax is a flat rate (about €2.20 on average, paid in CHF) assessed per person per night. The Swiss charge is a separate amount, not included in the quoted room rate. The actual amount may vary by location.

New requirements to travel to Europe! After delays, the ETIAS program is now scheduled to begin in mid-2025. It’s a travel authorization, not a visa. PHOTO: ETIAS, travel-europe.europa.eu

The ETIAS Travel Authorization Fee
When the EU’s ETIAS (European Travel Information and Authorization System) security program finally goes into force, those of us used to traveling to Germany and Europe visa-free with only a passport as documentation will have an additional expense and another hoop to jump through.

The ETIAS security system is a direct, if somewhat delayed, response to the similar ESTA (Electronic Security Authorization) visa waiver program imposed by the US in 2009. Since then, Europeans have had to apply online for the ESTA security authorization and pay a $21 application fee (for two years) when traveling from the EU to the United States. But the EU has delayed implementation of its ETIAS program several times. The former latest ETIAS inauguration deadline was supposed to be November 2023, but the new ETIAS start date is now a somewhat nebulous “mid-2025.”

For now, US and other non-EU citizens who are visa-exempt for travel to the European Union, do not need to apply for the ETIAS travel authorization. (It’s NOT a visa, since it is part of a visa waiver.) It remains to be seen if the new 2025 deadline will hold. As of now the official ETIAS website clearly states: “ETIAS is currently not in operation and no applications are collected at this point.” However, the website does offer information about the upcoming ETIAS travel authorization (spelled “travel authorisation” in the British English the site uses).

For one thing, the ETIAS application fee is a bargain compared to the American ESTA fee: only 7 euros ($7.40 USD currently) for a three-year authorization versus $21.00 USD for the two-year ESTA authorization. As with ESTA, you apply for the ETIAS authorization online. It is tied to your passport, and when ETIAS goes into effect, you won’t be able to fly to or enter 30 European countries without both travel documents.

If all goes according to plan, you have a bit over 18 months before you need to worry about applying for your ETIAS authorization. In the meantime, you can get the information you’ll need from the official ETIAS website (link above). There are several third-party sites, but we recommend the official one.

– HF