The Berlin City Tax is increasingly becoming a burden for the tourism industry. Berlin is generating record revenues, while the hotel industry in particular is facing an unusually high number of insolvencies. Budget cuts in the cultural sector, structural traffic deficits and expanded tax requirements are exacerbating the situation.
Rising tax revenues, declining visitor numbers
With the city tax, Berlin is levying an overnight stay tax for private and business travelers, which has been 7.5 percent instead of 5 percent since January 1, 2025. At the same time, the taxation period was extended from 21 days to six months. Since the beginning of 2026, the tax has also applied to businesses with fewer than ten beds. As a result, the revenue of the state of Berlin from the city tax reached a new high. After 58.7 million euros in 2023 and 89.6 million euros in 2024, Berlin recently took in 150.35 million euros for the state budget.
The rising revenues are contrasted with an increasingly tense economic situation. Berlin recorded around 12.4 million visitors and 29.4 million overnight stays in 2025. This means that the capital remains well below pre-pandemic levels with almost 14 million guests and more than 34 million overnight stays. International business developed particularly weakly: the number of foreign guests fell by 4.3 percent, the number of their overnight stays by as much as 6.3 percent.
Senate weakens tourist infrastructure
At the same time, the funds for the city's cultural offerings have been significantly reduced. For 2025, the state cut the cultural budget by around 130 million euros, affecting opera and concert halls, orchestras, choirs and the State Ballet, among others. In doing so, the Senate is weakening offers that make a significant contribution to Berlin's tourist attractiveness.
In addition, there are structural weaknesses in local transport and high location costs at BER Airport. Airlines are reducing their services due to high fees, making travel to Berlin more expensive and complicated. On important routes, travelers are confronted with price increases of up to 35 percent.
"The revenues from the city tax must be reinvested transparently - in culture, public transport and city maintenance. This creates added value that benefits Berliners as well as guests of our city," says Stephan la Barré, Deputy Chairman of the Board of ApartmentAllianz Berlin.
Berlin's tourism industry in a downward spiral
Rising operating and personnel costs as well as the expansion of the city tax are making overnight stays and gastronomic offers in Berlin more expensive. In conjunction with declining guest numbers, this increases the economic pressure on small and medium-sized providers in particular, who make a significant contribution to the diversity of the tourist offer.
The insolvency trend illustrates the tense situation. In April 2026, the number of corporate insolvencies in Germany was 82 percent above the average of comparable months from 2016 to 2019. Particularly high values were found in the hotel and catering sectors. In Berlin, the unusually high number of hotel insolvencies was particularly striking.
Stephan la Barré comments: "Less supply and poorer quality endanger Berlin as a business location. The only way out of the downward spiral is to change course: take energy out of internal struggles, concentrate on the crucial issues and politically support successful practical examples. By investing specifically in quality and a strong offer, we are creating directly visible improvements and starting an upward trend from which the whole of Berlin will benefit."
