Bucharest City Hall Waives 3% Hotel Tax For 2011

The decision was transmitted to the operators late January through a letter addressed to the Federation of Romanian Tourism Companies by the Bucharest City Hall's General Department for Development and Investments.

"The tax is only applicable to revenue from accommodation, not from restaurants or from the renting of rooms for various events," said Mihai Rajnita, secretary general of the Romanian Hotel Industry Federation.

According to estimates by consultancy firm Fivestar Hospitality, the Romanian capital's hotel industry's turnover was EUR90-100 million in 2010. Revenue from accommodation services accounted for EUR70-80 million.

This means the City collected more than EUR2 million from the tax last year.

"I do not know how the City spent this money, but it should be invested in tourism promotion," said Mihai Acatrinei, general manager of the Ramada-Majestic hotel in Bucharest. He added that the hotel will reduce its fees by 3%.

The hotel tax rate is set by local councils to between 0.5% and 5% of the revenue from accommodation. The Ministry of Regional Development and Tourism intends to set a single nationwide hotel tax, on 2% of the net value of one night of accommodation.

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