Faro tourist tax generates nearly €1 million
Ilha do Farol (Photo: Associação de Turismo do Algarve)

Faro tourist tax generates nearly €1 million

Mayor says those who believed tourist tax would affect competitiveness were proven wrong

Faro raked in “nearly €1 million” from its tourist tax between March and October, the local council has announced.

“We were very satisfied, not only from the amount generated, but even more because it is double of what we expected,” Faro mayor Rogério Bacalhau told Lusa news agency.

2022 was the first year that the tourist tax was charged normally after being suspend for two years due to the Covid-19 pandemic.

The tourist tax of €1.5 per night is charged between March and October for up to seven nights. Children aged 12 or under are exempt.

According to Bacalhau, the tourist tax revenue shows that “Faro is currently a tourist destination, which it wasn’t a few years ago”. He also said that “those who predicted the tax would affect the competitiveness” of the tourism sector were proven wrong.

Bacalhau guarantees the tax will continue being charged and said he hopes other Algarve municipalities will begin introducing their own tourist taxes soon.

“This revenue is important for the tourism sector, because it makes it possible to carry out more investments to improve Faro as a destination,” said Rogério Bacalhau.

In other words, the money raised goes into improving “public spaces, heritage, cultural programmes and events and services provided to tourists.”

Last month, the Algarve Municipalities Association (AMAL) confirmed it is looking to introduce a ‘regional tourist tax’ in 2023, a proposal which is far from consensual among those in the tourism sector.

Hoteliers are fearful of its impact, while Algarve tourism boss João Fernandes questioned whether now is the “right time” to be reviving this topic.

The first borough to introduce a tourist tax in the Algarve was Vila Real de Santo António in 2018.

The goal of the tax, which is charged all-year-round, was to help cover the “maintenance of municipal equipment and infrastructures for tourists and residents, such as the sports complex,” and to help finance the municipality’s “participation in international fairs to promote the borough and its potential.”

The tax raked in €725,000 for VRSA in 2019, a sum which may be surpassed in 2022. The tax has already generated €626,000 for the council in 2022 between January and October.

In VRSA, €1 is charged per day up to a maximum of seven days at tourist establishments such as hotels, resorts, tourist apartments, rural hotels and local lodgings, and 50 cents per day at camping sites and motorhome parks.

While other municipalities in Portugal suspended their tourist taxes during the pandemic, VRSA continued to charge it as it is still receiving financial support via the Municipal Adjustment Programme (PAM).

The VRSA tax raked in €465,000 in 2020 and €529,000 in 2021.

By Michael Bruxo

michael.bruxo@portugalresident.com