Taxing tourism has become a high priority for mitigating overtourism and climate change, but what can it achieve and who would reap the benefits? With the UN Oceans Commission weighing in and heated discussion in his native Norway, advising journalist, conservationist, and tourism consultant, Arild Molstad reviews the current debate.
How Coastal Destinations Can Best Deploy Taxation?
As the problem of overtourism is hitting an increasing number of destinations worldwide, many countries seem to think that a tourism tax is the answer. Maybe so. However, the dispute over how to design a just and efficient tax model raises challenging questions: Whom to tax? At what rate? For which purpose? Who should collect it? Who should receive the proceeds?
Few industries share tourism’s tendency to spread its impacts so widely and often irreparably inside a nation’s economy. If a tourism tax is to generate significant green benefits locally, it must direct visitor flows where it can be most effective and help safeguard fragile natural and cultural assets.
“Our fjords can handle visits, but they must create value without destroying local character and quality of life. Without a holistic approach to visitor management and taxation, the fjords risk ecological and economic collapse.”
—Andreas Wollnick Wiese, Norwegian mayor
These questions take on additional complexity in coastal destinations. International big cruise tourism is rebounding from the pandemic setback, once again flooding fragile ports with thousands of day trippers. Often these small cities are not prepared or able to handle the colossal surge in visitors leaving no overnight benefits. Could a cruise tax replace the tourist surcharge added to the hotel bill in coastal cities? Can the two co-exist?
In June, I attended the massive UN Ocean Conference 2025 (UNOC) in Nice, France. Close to 20,000 delegates and more than 100 heads of state gathered to discuss measures for tackling ocean warming and pollution. Overtourism in many of the world’s coastal zones was in focus, including the vulnerable state of my native Norway’s popular fjords. Globally, tourism is one of the ocean’s largest industries, comparable only to fisheries.
Climate Change
The tourism industry’s linkages to many other sectors were also on the agenda, such as transportation. Experts studying the magnitude of global tourism fossil fuel emissions have called it the industry’s “Achilles’ heel,” advocating a land, sea, and air approach to slow global warming. Climate change in the form of landslides, floods, and extreme rainfall causes ever increasing extensive and costly damage. “We need decisions more than research” was the refrain in June at UNOC’s Blue Finance Forum over their concern with threats to coastal zones around the world.
Taxing Beds versus Berths
An argument continues between those who prioritize taxation of hotels rather than the faster-growing Big Cruise segment. The longer it persists, the greater the loss to coastal destinations, whose funding for conservation and maintenance will be put on hold. Regardless, the crucial “polluter pays” principle from the Paris Climate Agreement must be consistently applied to tourism taxes everywhere.
Even Norway
The country’s sustainable tourism reputation is at stake. In the national media a growing number of stakeholders and experts are calling for a greater emphasis on sustainable transport in the national tourism strategy.
“We need national support to steer the tourism tax discussion in the right direction,” says Mayor Andreas W. Wiese in Norway’s Luster, a cluster of communities sheltered by the steep mountains in the magnificent Sognefjord, one of the world’s longest. “The proposed hotel accommodation tax misses the sustainability target, which should also include cruise passengers, as well as motorhome travellers and illegal campers in the national parks.” The same applies to the vulnerable infrastructure of the Western fjords, a region on the UNESCO World Heritage list where stunning scenery generates the better portion of Norway’s total tourism revenue.
A new, comprehensive tourism tax, including a cruise tax according to the polluter pays principle, would enhance the nation’s reputation and generate funding for vulnerable ecosystems and communities.
Community benefit
Norway typifies how the future of the sustainable destination stewardship model is in play worldwide. Even this wealthy country requires a far more thoughtful, holistic, and cross-ministerial commitment than its citizens have seen so far. While ever-larger cruise ships frequent the Norwegian coast, traditional boat and ferry routes are threatened with closure and bankruptcy, due to shortage of local capital. The tourist boat in the Hardangerfjord, for instance, serves both local businesses and Norwegian travellers, while also catering to a growing clientele of international passengers during a season that’s beginning to stretch to six months, thanks to global warming.
Taxation revenue and investment from the private sector, working in close cooperation with government agencies, could address the country’s old – in places decrepit – public transportation system: narrow, accident-prone roads, unreliable trains, and a ferry network needing a makeover. Instead, politicians who should know better are busy courting cruise giants, whose profits run for shelter in distant, often illegal tax havens rather than benefitting the coastal communities on which they depend.
Cruise-ship “rent tax”
One innovative discussion point during the Nice ocean summit was the idea of a nature-resource dividend – also known as a rent tax – on large cruise ships whose emissions pose a menace to pristine coastal locales, while generating a so-called “super profit” for their vulnerable ecosystems. Whether a nature dividend tax would target the cruise companies or the passengers – or both – is up for debate. Regardless, it could be the answer to limiting the overall burden on coastal destinations while simultaneously generating significant funding for environmental improvements and competitive local transportation.
Are coastal countries up to the task to think innovatively – both long- and short-term? To discover the multiple gains just waiting to be implemented? With climate change reshaping the world, the question applies wherever ocean meets land.
There’s no time to waste.
*UNOC: The High-Level 2025 United Nations Conference to Support the Implementation of Sustainable Development Goal 14, “Conserve and sustainably use the oceans, seas and marine resources for sustainable development” was held in Nice, France, 9-13 June 2025. The overarching theme of the Conference was “Accelerating action and mobilizing all actors to conserve and sustainably use the ocean”.