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jun 10 2010

Rome considers a new nightly hotel tax. Would you pay it?

The European debt crisis has been hailed as good news for American tourists, whose dollars now go further. As of today, one euro is valued at $1.21, a significant drop from last spring's exchange rate of $1.40. But news out of Rome this week suggests that tourists may soon start paying a price for Europe's imbalanced budgets.

Bloomberg reports that Prime Minister Berlusconi's government plans to slash €200 million from its annual contribution to the city of Rome—a belated austerity measure like those sweeping Spain, Greece, and much of the continent.

To make up some of those funds, and possibly avoid raising taxes on residents, Roman officials have proposed a hotel tax of up to €10 ($12) per person per night. The tax amount would be based on the number of stars assigned to a hotel by the Italian government. Of Rome's nearly 50,000 rooms, more than half are four or five stars, according to Bloomberg, and those would charge the highest amounts. (Rome already has a 10 percent hotel tax that's typically included in the advertised room rate.)

I called Hotel Re di Roma, where I stayed last March, and spoke with manager Mariano to get his take on the proposal. He told me that if the tax goes through this fall, the amount for three-star hotels like his would likely be €3 ($3.60) per person per night—which could easily buy you a gelato. For a couple staying four nights, the tax would come to an extra €24 ($29).

"I'm furious about this tax and don't understand how the officials can be so blind," Mariano told me. "Tourism is Italy's most important industry, not Fiat." He added that most local hoteliers were up in arms and urging the city to find other revenue sources. He said that if the tax does go through, Hotel Re di Roma and some others plan to absorb the cost rather than pass it on to clients. (Mariano acknowledged that the tax has a precedent; Rome charged a nightly tax in the 1990s, but hoteliers got it repealed.)

Those in favor of the tax argue that many cities, such as Paris, already charge a similar nightly tax. Luca Magni, head of branding and communications for the five-star Baglioni Hotels Group, told Bloomberg that Rome's proposed tax of up to €10 per person per night would be "irrelevant for luxury travelers, while it may have a different impact on three-star hotels and low-budget tourists."

So is Luca's hunch correct? Would this new tax indeed have an impact on your travel plans?

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Note:This story was accurate when it was published. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.

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