Is there room for a room-tax in the Canary Islands?

Abstract

Tourism ranks among the most important economic activities in the world. Recent figures from the World Tourism Organisation (UNWTO, 2018) show that the number of international tourist trips reached nearly 1.4 billion in 2018, generating an economic impact estimated in US$ 1.7 billion (and 10 per cent of the jobs in the world). Despite the fast growth of many competitive destinations, Europe is still the main tourist destination with 51% of arrivals and 39% of the total income generated by international tourism.

However, there is also consensus about the substantial negative impacts of international tourism both at a global scale (mainly air transport greenhouse gas emissions) and on local communities (i.e., environmental externalities such as pollution, congestion and resource depletion). As tourism depends heavily on the physical environment but also has a significant impact on it (Tisdel, 2005), tourism sustainability has become a central issue in the last decades. A substantial academic debate has focused on the use of measures and instruments to protect the environment. Under some circumstances (Pazienza, 2011; Piga, 2003; Rinaldi, 2014; Schubert, 2010), the use of tourist related taxes might constitute an efficient way to cope with tourism related externalities. Partly for these reasons, the use of environmental taxation in this sector has been receiving increasing attention in the last decades (Backhaus, 1999; Barde & Owens, 1996; Cirer Costa & De Ibiza, 2008; Corthay & Loeprick, 2010; Gago, Labandeira, Picos, & Rodríguez, 2006; Gago, Labandeira, Picos, & Rodríguez, 2009; Gooroochurn, 2004; Hughes, 1981; Rotaris & Carrozzo, 2019; Sheng, 2011; Sheng & Tsui, 2009; Tavares, 2011).