Munich's Financial Drain in Champions League Final: Explanation of 700,000 Euro Loss amidst Numerous Visitors
Title:"Champs League Gold, but Missing Out on Dough: Munich's Overnight Tax Saga"
By: Sascha Karowski
Flashback:
Munich recently hosted the Champions League final, bringing 90,000 vacationers for a thrilling football showdown. It's a financial win, but not as grand as it could've been—since the city lacks an overnight tax[1].
Core Concern:
The Free State has vetoed Munich’s attempt to implement a bed tax, leaving millions on the table. SPD leader, Christian König, estimated around 700,000 euros in revenue would've been gained[1].
2023 Ambitions:
Last year, Munich City Treasury eyed a five percent lodging fee for hotel guests, projecting annual benefits of 60 million to 80 million euros. Unfortunately, the state nixed this idea, citing possible harm to tourism and increased burdens on hotels and guests[1].
How's the Rest of Germany Faring?
In most federal states, an overnight tax, or bed tax, is common. Cities like Berlin, Hamburg, Cologne, and Frankfurt have seen a rising number of overnight stays after its implementation[1].
Stuck in Legal Limbo:
Munich challenged the Free State's ban in the Constitutional Court, accusing them of overreach in local self-governance[1]. Bamberg joined the lawsuit, and the proceeding remains ongoing[1].
The Fiscal Fallout:
The department for work and economy anticipates an extra 46.2 million euros from city businesses due to the Champions League final. An estimate by the Bavarian Hotel and Restaurant Association (Dehoga) points towards about 90,000 guests stayfrom outside the city[1].
The SPD’s Plea:
Christian König argues that, if Munich could introduce the overnight tax, they would've pocketed half a million euros. He urges Söder and Aiwanger to acknowledge that major sports events justify overnight taxes, ensuring fair distribution of burdens and benefits[1].
Footnotes:1. "Overnight Tax" is formally known as a "tourist tax" or "Kurtaxe" in Germany.
Insights:- Most major German cities have implemented an overnight tax, while Munich has yet to do so.- Major events, such as the Champions League final, can provide increased revenue to host cities, especially if an overnight tax is implemented.- The controversy surrounding Munich's overnight tax is ongoing, with the city challenging the Free State's ban in court.
- Despite the financial success of hosting the Champions League final, Munich missed out on potential revenue due to the absence of an overnight tax, a common feature in most business sectors across cities like Berlin, Hamburg, Cologne, and Frankfurt.
- The Free State’s veto on Munich’s proposed bed tax during last year's discussions estimated potential annual benefits of 60 million to 80 million euros from the finance sector, with the Champions League's themed football event as one example.
- SPD leader Christian König advocates for implementing a lodging fee aimed at generating additional revenue for the city during major sports events, such as the Champions League, and ensuring a fair distribution of burdens and benefits among businesses and tourists alike.
