The taxes and fees on a hotel booking are the amounts charged on top of the bare room rate: VAT set by the country, city or tourist tax set by the municipality, fees set by the hotel such as resort or service fees, and a deposit, which is a refundable security rather than a cost. Some are collected online at booking, others by the hotel on arrival.
What is VAT on a hotel room, and is it included in the price?
VAT is the sales tax the country charges on the room. In the EU, the price a consumer is offered must include it, so a rate shown to you by an EU-facing site already contains VAT. The rate itself varies by country. The EU sets a floor of 15 per cent for the standard rate and lets member states apply one or two reduced rates of at least 5 per cent to a list of categories, and whether hotel accommodation gets the reduced rate is a national choice. Denmark has no reduced band at all: a single standard rate of 25 per cent, so a Danish hotel night carries 25 per cent VAT. Elsewhere the reduced rates on the EU's own table, updated in July 2026, are 7 per cent in Germany, 5.5 or 10 per cent in France, 10 per cent in Spain and Italy, and 9 per cent in the Netherlands. Which rate the hotel actually applied to your room is on the invoice it issues.
Two things follow. First, VAT is never an extra you can avoid; it is part of the price by law in the EU, so a site that adds it at checkout is not showing you a legal EU price. Second, the amount labelled "tax" on a booking summary is often simply the VAT that was already inside the rate, broken out for information. That line is not new money, and it is not something the hotel invoices you for separately.
Outside the EU the picture differs. In the US, sales and occupancy taxes are set by states and cities and are commonly quoted on top of the room rate. The federal fee rule that took effect on 12 May 2025 requires the total price to include all mandatory fees but lets government taxes be shown later, as long as they are added before you are asked to pay.
What is city tax on a hotel, and why do I pay it at the hotel?
City tax, tourist tax, taxe de séjour, occupancy tax: different names for a local levy on overnight stays, set by the municipality and collected by the accommodation, which passes it on to the city. The hotel is the tax collector, which is why so many bookings say "city tax payable at the property". The site did not collect it because the city expects the hotel to.
How it is calculated varies. Amsterdam charges 12.5 per cent of the overnight price excluding VAT, and the city's own page states that the accommodation charges it to guests and pays it on to the municipality. France charges per person per night, with the amount depending on the type and official classification of the accommodation; it is collected by the hotelier, or by the booking intermediary, and remitted to the commune. Children under 18 are exempt in France. Other cities charge a flat amount per person per night, often capped after a number of nights, and many exempt children below a certain age. The exact figures change from year to year, so check the city's own page or the hotel's information for the dates you travel. Our guide to tourist tax in 2026 collects the main destinations.
Where city tax is included in the online price, which happens, it should say so. Where it is not, the amount or the method of calculation should be stated before you book. In the EU, a site that knows a compulsory charge exists must tell you up front; the EU's consumer guidance says charges that are not optional should always be included in the initial price. If a site only says "local taxes may apply", ask the hotel what the figure is for your stay.
What is a resort fee, and is it legal?
A resort fee, also called a facility, destination or amenity fee, is a mandatory daily charge a hotel adds on top of the room rate, typically justified by pool, gym, Wi-Fi or similar. It is mainly a US practice. Because it is mandatory, it is part of the price of the room in everything but name, and that is exactly how regulators now treat it.
In the US, the FTC's Rule on Unfair or Deceptive Fees, effective 12 May 2025, requires businesses selling short-term lodging to disclose the total price inclusive of all mandatory fees, displayed more prominently than most other pricing information. The FTC's own example is a room advertised at 199 dollars with a mandatory 39 dollar resort fee per day: the fee must be in the total price. In the UK, the 2019 undertakings secured by the CMA committed the large booking platforms to show all compulsory charges such as taxes, booking or resort fees in the headline price, and the unfair commercial practices rules in force since 6 April 2025 require the total price including mandatory fees in any invitation to purchase. In the EU, a compulsory charge belongs in the total price under the Consumer Rights Directive. Resort fees are therefore legal, but hiding them until checkout, or until arrival, is not in any of the three markets.
If you still meet one at the desk that was not disclosed before booking, pay under protest, keep the receipt, and report the booking to the consumer authority in the country where the site operates.
What is a hotel deposit, and will I get it back?
A deposit is a sum the hotel holds as security against damage, extras or a no-show. It comes in two forms. A pre-authorisation on your card blocks an amount without taking it; it is released after checkout, though the release can take days to show on your statement. A cash or charged deposit is actually taken and refunded afterwards. Either way, a deposit is not a cost of the stay. It is your money, temporarily unavailable.
Some hotels also ask for part of the price at booking and the rest before or on arrival; the Danish consumer portal Forbrug.dk notes that a partial payment at booking with the balance before the stay is a common pattern. That is not a deposit in the security sense, it is a payment schedule, and it should be spelled out on the checkout page. Our guide to hotel deposits at check-in covers what to expect and what to bring.
Which charges are in the price, and which does the hotel collect?
| Charge | Set by | Collected by | In the online price? | How to check |
|---|---|---|---|---|
| VAT | The country | The hotel, via the price | EU: always. US: may be added before payment. | The tax line on the summary; the hotel's invoice |
| City or tourist tax | The municipality | Usually the hotel on arrival, sometimes the site | Sometimes; must be stated either way | "Payable at the property" wording; the city's page |
| Resort or facility fee | The hotel | The hotel, or the site | US, UK and EU: must be in the total | Any "fee per night" line; the hotel's own site |
| Service or booking fee | The site | The site | Must be in the total if compulsory | Compare list price with checkout total |
| Deposit or card hold | The hotel | The hotel | No, it is not a cost | Hotel page or confirmation; ask the hotel |
| Optional extras | The hotel or the site | Whoever sells them | No, and they may not be pre-ticked | Untick anything you did not choose |
Which fees can a booking site legally leave out of the advertised price?
Fewer than you might think. In the EU, the advertised price must be the total price inclusive of taxes, or, where it genuinely cannot be calculated in advance, the way it will be calculated. Optional extras may sit outside it, but the site cannot pre-tick them: a pre-ticked box is not consent, and money taken that way must be refunded. Extra charges for paying with an ordinary consumer debit or credit card are not allowed. In the UK, since 6 April 2025, an invitation to purchase must give the total price including any mandatory fees, taxes and charges, or how it will be calculated. In the US, since 12 May 2025, only government taxes and genuinely optional charges may be left out of the headline total, and everything must be added before payment is requested.
City tax collected by the hotel is the grey area in practice. A site that does not collect it can argue it is not part of its price, but it still has to tell you it exists and, where it can, how much it is. Treat any stay where that information is missing as a stay with an unknown extra.
How do I work out the true cost of a hotel stay?
- Start from the total on the payment page, not the nightly rate in the list. Check it covers the right number of nights and guests.
- Add anything marked "at the property": city tax, resort fee, parking. If only the existence of a charge is stated, write to the hotel and ask for the figure.
- Ignore the deposit in the cost, but make sure the card you bring has room for it.
- Check the cancellation line. A refundable rate and a non-refundable one at the same total are different products; our guide to non-refundable hotel rates explains the trade.
- Keep the confirmation. It should repeat the total and the terms, and it is your evidence if the desk asks for more.
In short
- VAT is inside the price in the EU by law. The tax line on a summary is usually that VAT broken out, not new money.
- City tax is set by the city and collected by the hotel, which is why it is so often paid on arrival. The amount must still be disclosed before you book.
- Resort fees are mandatory hotel fees and must be in the total price in the US, the UK and the EU.
- A deposit is security, not a cost. Expect a card hold; expect it back after checkout.
- True cost = checkout total + everything marked payable at the property.