The Strain of Tourism in Lisbon

As I navigate through the bustling streets of Lisbon, dodging tourists, I often think of a dear friend who once lived in Graça, worked in Chiado, and used to ride the 28 tram daily. Nowadays, she would have to walk both ways, as the trams are overcrowded, and the narrow sidewalks are packed with visitors.

In the evenings, areas like Bairro Alto, Chiado, and São Paulo come alive with younger tourists engaging in pub crawls, often leaving behind a mess of broken bottles and litter. The local restaurants are adapting, now serving XL codfish pastries stuffed with cheese and even offering a bizarre nata milkshake. Unfortunately, few authentic eateries remain, and the ones that do are struggling to survive amidst the tourism boom.

As the city center becomes increasingly tourist-centric, local residents are being pushed further away, with many feeling the strain of the tourism industry. The influx of foreign tourists, which surged from 4.9 million in 2011 to 11.1 million in 2022, is accompanied by a growing number of wealthy foreign residents taking advantage of tax benefits, while many locals are forced to relocate to the outskirts.

The Need for a Tourist Tax

The conversation around tourist taxes is becoming more prominent. Following the pandemic, Bhutan introduced a sustainable development tax of $200 per day, which was later halved to attract more visitors. Amsterdam charges a 12.5% tax on accommodation costs, translating to nearly €25 for a €200 hotel stay, which is significantly higher than Lisbon's increased tourist tax of €4 per day.

Lisbon has struggled to implement a €1 tax on cruise visitors since 2016, with only recently managing to charge a meager €2. In contrast, many European cities charge much higher fees for museum entries, often exceeding €20. This begs the question: why is a city like Lisbon satisfied with such low fees? Why not charge what it truly deserves?

Tourism is fundamentally different from most goods and services. The city itself is the main provider of this service, and there are limits to what can be charged based on comparable cities. However, Lisbon still possesses a unique charm that justifies higher entry fees.

There are compelling reasons to impose a tourist tax. Consider the costs of cleaning up after a city center littered with plastic cups and broken bottles. More importantly, how do we quantify the irreversible damage to the city’s cultural heritage?