GetYourGuide Passes Digital Services Tax to Suppliers

GetYourGuide announced on June 11, 2024, that it will pass the cost of digital services taxes (DSTs) directly onto its suppliers, including tour operators and activity providers. This policy change is scheduled to take effect on January 1, 2025. The company stated that this decision was made in response to the increasing financial burden imposed by DSTs, which were originally intended to target large technology companies.

GetYourGuide, a leading online platform for booking tours, activities, and attractions, explained that the DSTs are levied by various governments on revenue generated from digital services. While these taxes are applied to GetYourGuide's revenue in certain jurisdictions, the company has opted to transfer this additional cost to the businesses that list their offerings on the platform. This means that tour operators and other local providers will see a reduction in their net earnings from bookings made through GetYourGuide, as the DST amount will be deducted from their payments.

The company's statement highlighted that DSTs have become a significant financial challenge, and passing them on to suppliers is a necessary measure to maintain the platform's economic viability. GetYourGuide aims to ensure transparency in this process, though specific details on how the tax will be calculated and applied to each supplier's revenue were not immediately available. The move reflects a broader trend where the financial impact of new digital taxes is being shifted down the supply chain, away from the digital platforms themselves and onto the businesses that rely on them.

This decision by GetYourGuide could have a notable impact on the profitability of small and medium-sized businesses in the tourism sector, particularly those that are heavily reliant on online booking platforms for their customer acquisition. Tour operators and activity providers may need to adjust their pricing strategies or absorb the additional costs, potentially affecting their competitiveness. The implementation of DSTs and their subsequent pass-through by platforms like GetYourGuide raise questions about the intended beneficiaries of these taxes and their ultimate economic consequences for local businesses and the broader tourism industry. The company's rationale suggests that the current DST frameworks are not effectively targeting the intended large tech entities but are instead creating financial pressures on smaller, independent operators.