Should the Eco-Tax be lower in Winter?

Malta’s 2027 Budget proposed a nightly eco-tax of €8 for hotel guests and €10 for short-let visitors, representing increases of 433% and 567%, respectively, over €1.50. For two adults staying seven nights, the charge rises from €21 to €112 in hotels or €140 in short lets. Higher prices, however, do not automatically deliver higher-quality tourism.

Using the National Statistics Office’s (NSO) January–August 2026 expenditure benchmark, the additional charge would raise average trip costs by approximately 4.1% in hotels and 5.4% in short lets, assuming full pass-through and unchanged behaviour for stays within eight nights. Budget travellers, adult groups sharing apartments, and off-season visitors would bear the greatest proportional burden, a move that could filter out lower-spending tourists.

Malta’s proposed short-let rate would be 150% above Lisbon’s and 233% above Porto’s. These differences signal competitive pressure, but cannot predict lost bookings. Budget visitors could shorten stays or reduce restaurant and leisure spending, but higher average spending among remaining tourists could therefore conceal weaker total receipts.

Tourist tax per adult per night

HotelsShort letsAs listedSort by hotelsSort by short lets

Balearic Islands, Spain€3.30€2.20

Porto, Portugal€3.00€3.00

Ljubljana, Slovenia€3.13€3.13

Bratislava, Slovakia€3.50€3.50

Greece€5.00€4.00

Lisbon, Portugal€4.00€4.00

Rome, Italy€7.50≈€5.50

Berlin, Germany≈€4.54≈€5.78

Edinburgh, UK≈€4.92≈€6.53

Malta (proposed January 2027)€8.00€10.00

Barcelona, Spain€9.24€10.45

Paris, France€8.45≈€15.93

Amsterdam, Netherlands≈€10.35≈€18.44

Investment follows expected returns. If operators absorb the tax, margins and refurbishment budgets face pressure. If visitors absorb it, occupancy becomes vulnerable. Lower expected long-run profits could discourage restoring old townhouses, whose substantial renovation costs take years to recover. Taxing restored properties and poorly maintained apartments the same way offers no direct reward for upgrading. Malta could complement taxation with targeted incentives for verified restoration, accessibility and energy efficiency, rewarding measurable improvements rather than expenditure alone.

Lower tourism returns could redirect properties towards worker accommodation. This could expand residential supply, but weak enforcement could make overcrowding commercially attractive. Higher charges also increase incentives for undeclared bookings, strengthening the case for platform collection and inspections.

Rates should vary by season, with lower shoulder and winter charges to protect demand. Earmark tax proceeds directly for public cleaning, refurbishment, and upgrades to tourist areas, along with essential infrastructure, and publish spending and results so residents and visitors can see tangible improvements.

Finally, taxation and planning must pull together. Additional hotel floors and development permits should reflect demand, existing capacity and infrastructure constraints. Expanding beds while pursuing higher returns from fewer visitors risks discounting and weaker profitability. Prioritise upgrading existing accommodation and public spaces, with new development demonstrating added quality. Success means retaining more value locally, enabling viable investment, and improving resident wellbeing.