Tourists Face Mallorca Car Tax

Tourists to the Spanish Balearic islands will have to pay a controversial new tax next year which, travel agents say, will accelerate the steep decline in visitors.

Mallorca, Ibiza, Menorca and Formentera will charge visitors who hire a car up to €5 (£3.40) a day in an attempt to raise an extra €12m in local taxes. The tax will affect many of the 4 million British people who visit every year, adding up to £50 to the cost of a two-week holiday.

Travel agents said the tax would drive away tourists who are increasingly turning their backs on what has been one of Britain's favourite holiday spots. "We have seen a fairly substantial drop in bookings to the Balearics over the last few years because they are no longer regarded as a good value destination," a spokesman for the Association of British Travel Agents said. "This move will encourage that perception and is extremely short-sighted."

Unlike previous attempts to tax tourists visiting Spain, the new tax is not designed to be spent on repairing damage to the environment; instead it will help decrease an annual overspend on health services.

The Balearic islands government scrapped a euro-per-day "eco-tax" on tourists, claiming it was damaging a sector that provides much of the islands' wealth. However, this has not boosted holiday bookings: package holiday bookings from Britain were down 16% this year as tourists sought cheaper destinations such as Turkey and Croatia. Bookings for this winter are currently some 17% lower.