Tour Operators Fear Germany's Expanded Value Added Tax Threatens Their Recovery

Despite largely making progress in their recovery from the pandemic, tour operators still face challenges in hitting pre-Covid metrics. And executives believe they've been dealt another big obstacle.

Germany's decision to apply a value added tax on January 1 on trips sold by non-European Union companies to the country could impede tour operators' ongoing rebound, industry executives believe. In addition to making trips to the popular destination more expensive, tour operators are concerned other nations would follow suit, complicating those companies' efforts to attract customers.

"The travel industry is still in recovery, and while it has improved immensely since the beginning of the pandemic, it is still not where it was pre-pandemic economically or logistically," said Ulla Hefel Böhler, the chief operating for TTC Tour Brands. She added the timing of Germany's move was surprising although the country had planned to implement the value-added tax in 2021.

"To create a