“Together with the Ministry of Transport and Communications and the Ministry of Economy and Innovation, we have developed a flight promotion model in which Lithuanian airports will take care of attracting airlines and ensuring the supply of quality flights that are important for business, and the City of Vilnius will help to stimulate demand for these routes. We are convinced that direct flights between the capital and major economic centres will help the city grow both in terms of tourism and foreign investment,” says Valdas Benkunskas, Mayor of Vilnius.
Preparing for increasing passenger flows
The programme is also needed to prepare for the opening of Vilnius Airport’s new terminal. The new terminal is expected to increase the airport’s capacity from 5 million passengers in 2019 to 8 million passengers per year.
“Tourism flows, which declined during the pandemic, are recovering and more and more visitors are choosing to come to Vilnius by air. We know that this mode of travel will become even more convenient in the coming years, so by implementing the objectives of the programme, we aim to efficiently use the city’s tourism potential and raise the capital’s profile in the international context,” says the Mayor of Vilnius.
The increase in the tourist tax from the new year will be used to increase the attractiveness of the city of Vilnius in the field of international air transport. According to a decision of the City Council, the fee will be EUR 2 per person per night from 1 January.
The municipality will allocate 30% of the local fee collected for the use of the municipality’s public tourism and recreation infrastructure to the programme, and the same amount from the municipal budget, up to a maximum of 20% of the amount of state funding for the promotion of flights.
“We have designed the funding mechanism to be linked to the results of the programme. If the flow of sightseeing and business tourism increases, the amount of tourist tax collected will also increase, and therefore the funds for the programme will also increase. Again, the city is obliged to keep pace with public policy, but it cannot act in isolation. The link with the level of state funding must ensure the proportionality and continuity of the programme, even in the face of political changes,” notes Vilnius Mayor V. Benkunskas.
Changes to the tourist tax – well discussed and timely
The need to change the tourist tax rate in force since the end of 2017 is due to the changing economic situation and the rising prices of services – according to annual inflation rates, the purchasing power of the existing tax has depreciated by 42% since 2017. The need to raise the levy has been discussed this year with representatives of the Tourist Board. The Council supported the increase, but at the same time identified the need to determine the exact use of the additional funds. The flight promotion programme approved by the Council, which will be financed by the tourist tax, will be mutually beneficial: the municipality, together with GO Vilnius, will aim to increase the capital’s visibility and attractiveness to tourists travelling by plane from abroad, which should lead to an increase in hospitality sector employment.
Examples of foreign cities have also been used to determine the level of the tourist tax. In The Hague, the pillow tax is €5.4, in Bologna and Basel €4, in Eindhoven and Bratislava €3.5 per night, in Prague €3.25 and in Amsterdam €3. In some foreign cities, a percentage charge is applied on top of the tourist tax, depending on the type of room type booked. This year, the tourist tax has been increased to €2 in Palanga.
