Fearing Visitor Fee? Compete on Experience – not Price

In Norway, there’s an ongoing debate around a proposed tourism visitor fee. It is a 5% fee, voluntary for the local district, aimed at maintaining destinations and improving infrastructure in areas under high pressure, much like many European countries already do. I don’t think many has stopped going to Italy, Switzerland or France because of this fee. But this is what many norwegian accomodations fear.

The idea is simple: the visitor pays a fee that is earmarked to help the places under the most pressure from tourists. Where locals feel the strain, where nature shows the wear, and where infrastructure needs support.

It’s not just a visitor fee. It’s an investment in the visited destination. The proposal is not perfect; it should include cruises and camping, but it’s a start. The details can be fixed later. In fact, it could even be called a flat fee rather than a percentage. Anyway, I will not bore you with details.

What surprises me is how many of the chains and accommodations competing on the lowest price have taken the lead in criticizing and fighting against this new initiative, chains like Strawberry and Scandic, for example. They have mobilized, together with NHO Reiseliv, which is the industry organization representing the interests of Norway’s travel and tourism sector. I my opinion, it's crisis-mongering. Don’t get me wrong. I understand the hotels and accommodations' fear: if their business model is keeping the price of their service lower than their competitor, they are naturally afraid to add to it. The differences are small.

And, this also raises another question: are we really going to keep selling our travel products, selling Norway on low margins? If we do, we’re in a race we never can win. It will always cost more up here in the north. The edge of the world.

Instead, companies should use this opportunity to evolve their product while the visitor fee helps develop the destinations. The places that focus on creating unique experiences will come out on top.

As Joe Pine and Jim Gilmore said in 1998, “A business defines itself by what it charges for. If you charge for undifferentiated things, you're in the commodities business. If you charge for physical goods, you're in the goods business. If you charge for the activities your people do, you're in the services business. To truly be in the transformation business, you must charge for the demonstrated outcomes your customers desire.” This rings true today, especially in the context of tourism. It’s not about selling a bed for the cheapest price; it’s about selling an experience.

Peter Thiel, in his book Zero to One, also emphasizes that businesses should aim to take a bigger part of their niche by offering something unique, not competing in a crowded race to the bottom. If we focus on crafting distinctive, transformative experiences, we create something people are willing to pay for, even at a higher price. That should be the focus instead of being afraid of a price increase of maybe 100 NOK a night, a couple of dollars. It is about time, when we think about it.

If your goal is to provide the cheapest service, I get it. But for many, it’s not about delivering a cheap bed; it’s about creating memories and experiences people are willing to pay more for. That 5% isn’t much if you create great experiences. You add it to the price, and the customers will pay.

The tourism tax can elevate the experience by improving infrastructure and giving back to local communities. If we use it to enhance quality, we’ll have a Norway that’s not sold on discounts but as a destination people want to pay for.

It’s time to raise the bar and shift the focus from low-price service to experience. That’s where the value lies. Competing on price is a bloody race to the bottom. There’s only one winner (the one with the lowest price) and many losers. That’s why some are struggling with such thin margins today. The low-price race is not healthy. Both businesses and clients are losing in this game.

If this proposal is withdrawn this time, I am afraid it will take many years before it is up in the governments table again.

I guess this debate is going on in other countries also? Let me hear your thoughts?